ICBA News Release
FOR IMMEDIATE RELEASE
ICBA Chief Economist Forecasts Solid Housing Market in 2006
First-Time Homebuyers Should Benefit from Slowing Price Appreciation
Washington, D.C. (January 5, 2006) — "Positive economic conditions in 2006 portend another solid year for housing, but expect a considerable cooling-off from the red-hot, record-setting housing run," said Paul Merski, Independent Community Bankers of America (ICBA) chief economist. Merski made his comments during a Homeownership Alliance conference call with other leading chief economists who met to discuss the 2006 housing and mortgage finance outlook.
A better balance between home prices and household income growth in 2006 and beyond will provide a fresh opportunity for first-time homebuyers. Despite reasonable mortgage rates, double-digit price appreciation in many markets severely strained affordability and priced potential buyers out of a home, according to ICBA.
"In 2006, Americans will not shy away from buying a home because economic fundamentals are in place for another good year in housing," said Merski. The fundamentals of ample jobs, robust GDP and household income growth, and contained inflation all suggest a solid year for the housing market. The historically attractive borrowing rates, excellent homeownership tax benefits, coupled with moderating home price appreciation will allow first-time homebuyers a reasonable opportunity to enter the market in 2006.
"I think the economy will surprise people on the upside," Merski added.
Also participating in the call were:
- David Seiders, National Association of Home Builders
- David Lereah, National Association of Realtors®
- Frank E. Nothaft, Freddie Mac
Based in Washington, D.C., the Homeownership Alliance is a coalition of more than fifteen organizations committed to ensuring support for the American housing system.