President and Chief Economist Sam Chandan of Chandan Economics and professor at the Wharton School of the University of Pennsylvania told Fox News Friday that the housing market will be somewhat of a snooze fest going into January.
While many homeowners are on a path of fury to sell their homes before Dec. 31 – given the chance of the fiscal cliff – it’s going to unfold like a “cash-for-clunkers program.”
Take a look at the clip at 1:24.
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By buying or selling a house before the potential tax increase goes into effect, homeowners are dealing with a lower tax advantage.
However, by selling so many homes before the year is out, Chandan expects the market will experience a lull at the top end of the market next year.
So, are all the forecasted reports for a strong, continued recovery in the housing market for 2013 true? Yes, but let’s not get ahead of ourselves.
Again, take a look at the bit at 2:18.
Put simply, by coming from such a low end of the spectrum the industry only has one way to go — up.
“It’s a slow recovery — a very early stage recovery — but we’re benefiting from modest job creation, at the same time we’ve got historically low mortgage costs and a smaller number of increase in the number of families who are able to qualify for those mortgages,” Chandan said. “You put those things together, along with the expectation that prices look like their picking up and so now is the right time to buy, and that starts to lead to some home sales.”
Although credit remains extremely tight, the bigger picture is identifying the types of mortgages Fannie Mae and Freddie Mac are acquiring, securitizing and bringing on to both entity’s books.
It’s an important piece to the housing market puzzle because it’s a key driver for banks and the origination of mortgages.
Combining all of these factors together what letter grade would Chandan assign the year a head?
The housing market earned a respectable B-minus.