Industry News

No bottom yet for housing downturn

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PHILADELPHIA -- We have yet to see the bottom of the current housing downturn, and the recovery will be slow and steady and heavily dependant on local economic conditions, affordability factors and level of exposure to poorly performing subprime loans, economists told a group of real estate reporters last week. The recovery will take longer than first anticipated, said Bernard Markstein, vice president of forecasting and analysis for the National Association of Home Builders. Many analysts and observers previously were expecting housing markets to perk up later this year, he said, but then the subprime market began showing signs of weakness in early 2007. "We're not going back to a party, but rather a nice simple diet of bread and some chicken broth," he said. Markstein and others expect the market to reach bottom some time this fall. Unlike past downturns, mortgage rates are not the problem, he said. Average rates on 30-year fixed-rate mortgages are around 6.4 percent, w...