Much of the recently released U.S. housing market data has been on the weaker side.
For more on this, see highlights of my report below, followed by a link to the full U.S. Outlook, delivered on August 24.Key observations:
- After peaking at 6.7% of GDP in the third quarter of 2006, residential investment as a share of GDP declined for 14 successive quarters, reaching a nadir of 2.4% in the third quarter of 2010.
- Despite the recent weakness in the housing data, home prices continue to rise, largely due to low inventory.
- Even though existing home prices have increased year-over-year for 77 consecutive months, prices relative to income are still nowhere near the levels seen just prior to the last housing downturn.
- Our forecast calls for a continued gradual slowdown in the housing market, which is typical for the late state of an economic expansion.
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