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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: Real Man who wrote (87504)10/10/2007 9:46:54 AM
From: Joe Stocks  Read Replies (2) of 110194
 
>>So, if rates stay low or go lower, housing will bounce back.<<

Without the return of the risky exotic mortgages that brought many more homebuyers into the market I would disagree. The households demographics don't support a bounce back as well. We add about 1.1 million new households a year. Some of those will move into apartments. We were building new homes at a rate much higher than that almost with the assumption that every new household would get a new single family house. I don't think the current rate of home building can be sustained.

I think housing starts will return to the pre 1995 level. Between 1995 and 2002 we had a surge of baby boomers (those born between 1950 and 1957) reach the age of acquiring their largest and most expensive homes of their lifetimes. After 2002 we extended the building boom with the exotic mortgages to less than qualified buyers. Those two trends are over and probably won't return for maybe decades.

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