Since 2012, almost every economist has predicted that the housing recovery would continue into each coming year and would be a key driver of economic growth. That was again the plan for 2014, but with the housing recovery now on the ropes those same economists are perplexed as to why. Yet, "hope" remains that the recent slowdown is just a "weather related" casualty.
For me, I now get to say "I told you so." The slowdown in housing is not due to the "weather." It began prior to the onset of the recent winter blasts. Nor will reduced distressed sales, delinquencies, negative equity or rising inventories salvage the predictions. These are all indicators "OF" the housing market, but not what "DRIVES" the housing market. The real answer to the slowdown in housing is not so difficult to comprehend and is something I have argued heavily in past missives as listed below:
• Housing, Is It Really Recovering?
• Housing, Is It Just The Weather?
• Is Housing Set To Lift Off?
• Rising Rates Squash Housing Recovery?
• Housing Recovery, What Has Been Forgotten?
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Housing will never recovering unless something is done in Washington to ease lending restrictions. I'm not saying we go back to the wild west lending of a few years ago, just make cash available to those who can pay the note back. Now you really have to have the money you need for the lenders to lend it.
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