MADISON, Wis. (6/18/09)--The U.S. housing market may be "bottoming out, which is crucial for the rest of the economy," Bill Hampel, chief economist for the Credit Union National Association, told BusinessWeek Tuesday.
Data issued June 15 indicated housing starts rose 17.2% from April to May to an annual pace of 532,000, BusinessWeek said.
Construction was being started at a pace above 2.2 million units per year in early 2006. In previous housing recessions, housing starts bottomed at 800,000, but the current housing market is "bottoming out at an incredibly low level" of below 500,000, Hampel told the publication.
A rise in household formation rates--young people moving out on their own, for example--could occur in the next couple of years, he added. "It's a fairly bullish picture for first-time home buyers," Hampel said.
However, because home prices are still declining, many Americans--including even those who are not moving soon--don't feel as good about their wealth because the level of their home equity is still shrinking, BusinessWeek said.
"The household sector is still heavily burdened by the debt it took on in the last 10 years," Hampel told the publication.
courtesy of cuna.org