Analysts are blaming the housing sector for the slow economic recovery.
Analysts say the real estate market often leads to economic recoveries. However, I expect housing will not provide as much support to this recovery has it has in previous ones, says Eric Rosengren, the president of the Boston Federal Reserve Bank.
Joel Naroff, president of Naroff Economic Advisers, says 2011 would be a transition year for housing with the market not going anywhere.
Housing construction has leveled off but some are still skeptical whether the real estate market is in true recovery mode yet. Housing starts for December are expected to fall 2.2 percent to a seasonally adjusted annualized rate of 543,000 after rising 3.9 percent to a 555,000 rate in November.
Building permits have reached their lowest levels since April 2009. Most experts blame the low building permits on the upswing in foreclosures.
The National Association of REALTORS® will release its December existing-home sales report on Thursday, which experts say will help shed more of a light on how the real estate market is really doing. Economists are expecting existing-home sales to rise.
Source: Housing: U.S. Economy's Achilles' Heel, MarketWatch (Jan. 16, 2011)