Positive Outlooks for the National Housing Market

house_up_arrow_122012The media seems to be full of positive outlooks for the national housing market.

Fannie Mae states that the housing market has turned the corner and a sustained recovery is under way.

Despite lower expectations for the economy’s progress as a whole this quarter, home sale and price trends suggest housing finally represents "a tailwind to growth," according to a monthly economic outlook released today by Fannie Mae’s Economic & Strategic Research Group.

"The housing market has turned the corner and a sustained recovery is under way," the report said, despite some significant challenges that remain ahead, including tight lending conditions, uncertainty surrounding mortgage regulations, and the fiscal cliff.

Home prices have seen strengthening year-over-year gains over the last several months and prices are expected to end the year on a positive note for the first time in six years, Fannie Mae economists said.

The CEO of JPMorgan Chase says that every single thing about housing is flashing green. As far as Greater Phoenix is concerned, our market has been flashing green for some 14 months. We have reached a point where the market is less frenetic but the outlook is still positive. At some point, higher prices tend to put a brake on buyer’s enthusiasm. That is what they are supposed to do.

If higher prices increase buyer enthusiasm then you have irrational exuberance taking over like it did from April 2003 through October 2005.

That is your first clue that the market is entering a bubble phase. That is not happening now.

Buyers are behaving rationally.

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