APA FORECAST DOWN
A “snail’s pace” is how APA – The engineered Wood Association described the movement in the U.S. economy in its June 2010 Housing Starts report.
The organization said single-family starts and permits “declined again” in June as the U.S. tax incentive program for home buyers wound down. “The housing market is expected to improve only slightly in the second half as the economy moves ahead at a snail’s pace,” said the APA, while adding that they have “revised the multifamily forecast up slightly for this year.” For 2011, they said they have “whacked” an even 100,000 single–family starts from the forecast “since housing fundamentals are still weak.”
The APA report also noted that further declines are expected in house prices later this year and into next year that “will keep consumer spending at modest levels and will keep many away for the real estate market.”
On a positive note, they say consumer debt is down and payments for many are lower. “At least many consumers have cut their debts and have lowered payments through refinancing and they are expected to spend when confidence improves.”
The APA also said nonresidential construction “is forming a bottom” while repair and remodeling is “moving sideways.” They added that industrial/manufacturing is beginning to weaken.
“The economy is expected to grow less in the second half of 2010, further weakening the fragile housing recovery and putting a damper on other markets as well,” concluded the APA. “A meaningful recovery in demand for wood products has most likely been delayed into 2011.”
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