The National Association of Realtors is (quelle surprise!) quite bullish on the future of the housing market. Not so fast, says Lance Roberts of StreetTalk Advisors:
He sees 2012 as another year of lagging sales, considering the average household debt for Americans over the age of 16 comes to $96,229 per person. In addition, the average income before taxes is roughly $54,110 and many Americans have a debt-to-income ratio of 177.8%, making it difficult for them to qualify for a home loan.
Roberts says the average median income for a family is $55,000, and the average median home sales price is $214,000. To afford such a home, the average American would have to put down 20%, or roughly $42,800. But, Roberts says that amount is nearly impossible to save, given the state of the economy and consumer debt levels.
"In today's credit constrained environment due to the financial crisis which has left the major banks saddled with millions of homes that are delinquent or in foreclosure -- there is little reason to lend money to borrowers who can't meet very stringent qualification requirements," Roberts wrote in a recent blog posting.
Still, his contrarian report arrives at a time when analysts are placing confidence in lower prices to spark a housing turnaround.
Even here in DC, which has been basically the only market to defy recent trends, housing prices stalled in the fourth quarter. And while housing starts had been finally recovering, new home sales fell in December, weakening what had started out as a strong quarter. Owner occupied sales rose, but all that does is eat up a wee bit of the outstanding inventory; it doesn't mean a return to growth. 2011 now stands as the weakest year for new home sales on record. And that's in a record low interest rate environment.
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