I am copying an article I received from Franklin American Mortgage Company that puts some definition around reasons I believe the market is coming back. Particularly, while some indicate that current conditions will direct more people to rent vs own, the statistics continue to support ownership.
"The average homeowner has a net worth that is about 41 times greater than that of a renter, according to a report from the National Association of Realtors. Homeowners’ net worth averaged between $150,000 and $200,000 this year, according to NAR. The trade group for Realtors said homeowner equity accounts for a substantial part of that net worth. NAR based its research on results from a 2007 Federal Reserve Survey that provides a snapshot of family income and net worth in conjunction with basic demographic makeup. The Fed survey is conducted once every three years. A 2010 survey has not yet been released. Homeowner net worth back in 2007 was 46 times greater than that of renters, reflecting the economic conditions before housing price declines and a decreasing equities market. The average net worth of a homeowner was above $200,000, while the average net worth of a renter in 2007 was $5,000. Source: HousingWire
Total housing sales in 2010 will be down about 8 percent from last year, and will mark the bottom of the downturn, says a monthly report from Fannie Mae economists. The economic outlook from Fannie Mae is fairly upbeat looking ahead. Foreclosures will keep housing sales subdued in the final quarter of this year, the report says, but sales will see gradual improvement in 2011. “We expect home sales to increase by about 3 percent in 2011, says Fannie Mae (OTC BB: FNMA) chief economist Doug Duncan. “However the pace of the recovery will be largely determined by labor conditions. If hiring improves at a faster pace than expected, home sales will likely see a stronger gain in 2011 and vice-versa.” Improving financial conditions and recent encouraging signs from the labor market should set the stage for an above-par growth trend by mid 2011, the report says. Source: Washington Business Journal
A tougher economy is changing the way people regard housing design. Here are some of the new realities:
• The ideal home size is less than 2,000 square feet, according to Trulia.com.
• Formal living rooms and dining rooms are out; flexible space that can double or triple as home offices,
guest rooms or dens is most appealing.
• Porches are back.
• Energy efficiency trumps everything, with a private wind turbine in the back yard a real winner.
Source: USA Today"