Job growth and household formations are well on track to support a turnaround in the housing industry, according to Ara Hovnanian, president and chief executive officer of Hovnanian Enterprises.
“Housing is driven by household creation,” Hovnanian recently told almost 200 New Jersey municipal officials and their advisors. “The demographics are solid. The United States population continues to grow.”
With mortgage interest rates trending slightly down in recent weeks and remaining at affordable levels, and builders moving aggressively to reduce their inventories of unsold homes, the housing market has started showing some signs of stabilizing.
The latest indication that the market is slowly making its way back came from the Mortgage Bankers Association, whose Weekly Mortgage Applications survey, for the week ending Dec. 1, 2006, showed an 8.1 percent increase in mortgage loan application volume on a seasonally adjusted basis.
In the meantime, as balance is restored in the housing marketplace, a process NAHB Chief Economist David Seiders expects persist into the middle of this year. Hovnanian has been reminding its customers that conditions are not nearly as bad as they have been during previous housing downturns, largely because the nation’s economy remains relatively vibrant.
FOUNDATIONS POINT TO TURNAROUND IN HOUSING INDUSTRY
February 15, 2007