Forecasters Predict Recovery Next Year
Good news: An overwhelming majority of economists and forecasters feel quite optimistic about where the economy is headed.
Not-so-good news: There is great discrepancy between these optimists regarding when the economy will truly get back on its feet.
While it’s impossible to predict exactly when an economic turnaround will take place, the consensus is a positive one. Many economists expect to see a recovery about halfway through 2010. Others, however, are wary to predict we’ll see improvement that quickly.
The housing market is the first place most look to for signs of improvement or decline, and for the first time in a while housing experts are speaking optimistically about the upcoming months.
Referring to our economic state as “The Great Recession,” Chief Economist for Moody’s economy.com Mark Zandi said he expects it to end fairly soon, citing the federal stimulus package and adjusted consumer spending as contributing factors.
Zandi believes a “substantial pickup in economic activity” won’t occur until 2011 or 2012, but that housing starts should return to normal by fourth quarter of next year.
Others, such as NAHB Chief Economist David Crowe, expect a recovery sooner. According to an article by Builder, Crowe predicts single-family housing starts to increase to 517,000 next year – a 36 percent improvement – and that “the economy will grow during the second half of the year as stimulus spending begins to have an impact.”
Bryan Banish, president of iGlobal Strategies LLC, wrote in a recent blog post that we’re starting to see consistent results that are bringing us closer to recovery. July yielded “almost universally positive” results:
- New homes sales jumped 11 percent
- Mortgage rates have remained at low levels
- Existing home sales climbed for the third straight month
- House prices as measured by the Case-Shiller Index showed the first month increase since their peak in 2006.
Because the housing market has likely hit its bottom, the only way to go now is up. Signs of stabilization such as increases in housing starts and home sales are strong indicators of an economic rebound. This transition will continue to take time, but if we focus on positive factors (such as those listed above) and work on contributing toward those trends, a recovery is in near sight.