Archive for October 23rd, 2009

Future Looks Murky for Homebuilders

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Even though home sales are improving and prices are increasing, the outlook for homebuilders doesn’t seem to be heading in the same direction. Moody’s Investor Service, in fact, recently reported that it expects homebuilder companies’ numbers to decrease by approximately 8% in the upcoming year.

Moody’s expects the overall housing market to find itself in a better situation, but combined with the hits the building industry has taken in the past few years, the forecast isn’t so positive. The service predicts that homebuilders will still suffer an overall loss in 2010. Moody’s further predicts that these losses may linger into the first half of 2011 as well–even as the market works toward recovery.

And as is often seen when it comes to adverse market conditions, things may get worse before they get better. With an increase in unemployment malingering foreclosures, further housing price decreases may be just around the corner—and for a period that is longer than what was originally expected by analysts.

Moody’s and other services do expect the overall housing market to take a positive turn, but there are some obstacles it still has to overcome–obstacles that may make the recovery a more long-term than short-term process.

Those doing the best in this market are the folks who’ve been using their homes to pay for their homes. Yes. Using the equity in their home to pay off their mortgage principal. The result? They can buy more real estate, always a good investment when entered into correctly. Especially when prices are low. Smart investors will snap up homes they can rent as affordable housing and still make a handsome profit. Watch a video presentation of how to pay off your home years sooner.

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