Nonetheless, when compared with still low levels of sales, the supply of new houses remains elevated. In addition, the overhang of vacant houses on the market for existing homes is sizable, and the pace of foreclosures is likely to remain very elevated for a while, which should further add to that overhang.
Thus, even with affordability quite favorable and house price expectations brighter, I anticipate a relatively subdued pickup in housing starts over the coming year. In the business sector, the extraordinary amount of excess capacity is likely to be another factor tempering the rate of recovery.