Jazen
12-07-2005, 09:15 PM
This is scary...
UCLA study sees a housing slump in '06
Made a lot of money on your house in the last few years? Enjoy it while you can. A new study says a sustained decline will hit the U.S. housing market next year, costing the nation as many as 800,000 jobs.
The slowdown is likely to last several years, with as many as 500,000 construction jobs and 300,000 financial sector positions lost, the quarterly Anderson Forecast predicted.
“We expect housing to start slowing the economy this quarter or the next,†said Edward Leamer, director of the study done at the University of California, Los Angeles.
“Some jobs in manufacturing might well disappear as a result of weakness in housing, but this may be offset by jobs brought home or not lost to foreign competition,†he wrote.
The forecast said eight of the last 10 economic recessions were started by housing market slowdowns. Though the coming cool-down will cause a drag on the nation’s economy, it will fall short of triggering a recession, the forecast said.
The report cited several signs that the decline could be under way:
New construction of housing in October was down 5.6 percent from the previous month, with new construction of single-family housing accounting for a 3.7 percent dip.
New home sales have declined.
Applications for home mortgages have trended downward since late September as rates increased.
In some regions, homes are remaining unsold longer and the pace of housing construction is outpacing population growth, which could spell a decline in demand.
Home-building stocks were clobbered by the report with such stocks at Lennar (LEN, news, msgs), D.R. Horton (DHI, news, msgs) and Centex (CTX, news, msgs) down more than 3% each.
UCLA study sees a housing slump in '06
Made a lot of money on your house in the last few years? Enjoy it while you can. A new study says a sustained decline will hit the U.S. housing market next year, costing the nation as many as 800,000 jobs.
The slowdown is likely to last several years, with as many as 500,000 construction jobs and 300,000 financial sector positions lost, the quarterly Anderson Forecast predicted.
“We expect housing to start slowing the economy this quarter or the next,†said Edward Leamer, director of the study done at the University of California, Los Angeles.
“Some jobs in manufacturing might well disappear as a result of weakness in housing, but this may be offset by jobs brought home or not lost to foreign competition,†he wrote.
The forecast said eight of the last 10 economic recessions were started by housing market slowdowns. Though the coming cool-down will cause a drag on the nation’s economy, it will fall short of triggering a recession, the forecast said.
The report cited several signs that the decline could be under way:
New construction of housing in October was down 5.6 percent from the previous month, with new construction of single-family housing accounting for a 3.7 percent dip.
New home sales have declined.
Applications for home mortgages have trended downward since late September as rates increased.
In some regions, homes are remaining unsold longer and the pace of housing construction is outpacing population growth, which could spell a decline in demand.
Home-building stocks were clobbered by the report with such stocks at Lennar (LEN, news, msgs), D.R. Horton (DHI, news, msgs) and Centex (CTX, news, msgs) down more than 3% each.