Morgan Stanley Economists: Housing Market Insights – Out of the Woods
Recovery Underway Appears Sustainable:A shift away from distressed towards non-distressed transactions, historic lows in mortgage rates that have buoyed non-distressed home prices, steady declines in shadow inventories, the rise of short sales in distressed home disposition, and the rise of cash sales have all contributed to the recovery in home prices.
Mortgage Credit Still Constrained but Relief on the Way:While mortgage credit remains tight, recent policy pronouncements such as the FHFA’s announced Reps and Warranties relief are steps in the right direction. We are optimistic that mortgage credit availability will improve to some extent – and given how tight it has been, even a slight improvement can be meaningful.
A Strong Rebound in Housing Activity and Prices:Over the past few months, data on different aspects of housing – starts, building permits, sales and finally prices – have been resoundingly positive.
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