CHICAGO--()--In the March issue of Themes on the Economy®, Diane Swonk predicts “the housing market will be a major driver of growth in 2013, contributing more than one percent to real GDP including spillover effects for consumer spending and manufacturing activity.” One big reason: “Many of the worst of underwater properties have already gone through foreclosure and been sold,” she explains. That means the value of homes sold recently is higher.
“risks are to the upside, given the easier credit for home builders and a new willingness by builders to help buyers finance home purchases. We haven’t seen this since the boom years; even speculative construction is up.”
Mesirow Financial’s chief economist also notes that credit for builders has finally eased, so the housing market “risks are to the upside, given the easier credit for home builders and a new willingness by builders to help buyers finance home purchases. We haven’t seen this since the boom years; even speculative construction is up.”
On the other hand (as economists sometimes say), the forecast assumes that Washington will avert disaster in the form of sequestration lasting a full eight months and instead decide to resolve persistent “uncertainty surrounding near-term federal deficit reduction.” If not, she warns that one of the most robust housing markets, Washington, D.C. and surrounding suburbs in Virginia and Maryland, could bear the brunt of fiscal drag on the economy.
Mesirow Financial is a diversified financial services firm headquartered in Chicago. Founded in 1937, it is an independent, employee-owned firm with approximately 1,200 employees globally. With expertise in Investment Management, Global Markets, Insurance Services and Consulting, Mesirow Financial strives to meet the financial needs of institutions, public sector entities, corporations and individuals. For more information about Mesirow Financial, visit its website at mesirowfinancial.com.