Buying in a Soft Housing Market

(Editor's note: Providing encouraging information to prospective home buyers on opportunities in today’s changing housing marketplace, the following article by national syndicated columnist Ken Harney appears in the Sept. 29 issue of the NAHB consumer e-newsletter NAHB HouseKeys. It is also the latest addition to the Back to Basics toolkit materials available online to help NAHB members respond to new challenges in a slower environment for home sales. Home builders associations and home builders can reprint or link to this article to help convey to the public the message that current market conditions are favorable for buying a home.)

Everybody knows the "housing boom" is over in most parts of the country. But what does that mean for people who are thinking about buying a new home?

Is a "soft" market a good time to buy? Or is it a time when it's smarter to just sit on the sidelines, and wait and see where things are headed? ...

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Downswing Will Not Drag Economy Into Recession

Looking a bit rougher than the soft landing housing analysts had been expecting, the current housing downswing is unlikely to lead to economic calamity — largely because interest rates are historically low, the overall economy still is moving ahead and builders are stepping up efforts to get their unsold inventories under control, according to economists participating in a teleconference hosted by NAHB on Sept. 27.

NAHB Chief Economist David Seiders said that he is forecasting an 11.5% decline in housing starts this year, followed by another 11.7% drop in 2007. Housing should hit bottom by the middle of next year, and will be approaching a demographically-based trend production level of about 2 million units in 2008 (including manufactured homes). ...