I’m thinking that if housing is to contribute to GDP and employment growth, there will more new construction.
New construction and continued foreclosures will mean more choices for buyers in the near future. Buyers do have choices now, but they are not at risk of losing choices soon.
Yes, historically housing has led us out of recession. It’s different this time where housing lags recovery (housing also led us into the recession whereas, historically, a housing downturn follows general employment losses).
If unemployment is structural rather than cyclical, then fewer new buyers will enter the housing market. Given the high ownership rates of the last decade, the strongest most able buyers already own homes.
Can the economy power along without housing? It did in 2010.
It would be a good thing for GPD growth to decouple from housing. If that were to happen, policy makers could withdraw housing support without endangering economic growth. And I suspect that would result in more choices and lower prices for buyers who qualify.
As to sdrealtor’s point of buying now or waiting, well, it all depends.
If buyers want a certain house on a certain street, or certain neighborhood, they may want to take the opportunities that open up. Those would be buyers who view houses as consumption or lifestyles (eg making the wife happy or having the desired family life).
But those who view houses as interchangeable units of shelter, or investments, may wish to continue to watch the market and wait a little longer.
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