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Will Economic Uncertainty Derail Real Estate’s Momentum?

Some are questioning whether the current rally in the real estate market will fall victim to financial uncertainty regarding the impending debt ceiling debate and sequestration. However, many experts believe housing will be able to maintain its current momentum.

In a March 2013 report, Someone Say House Party?, analysts at Bank of America/ Merril Lynch concluded:

“We believe that the gain in home prices can persist despite subpar economic growth this year…Absent a significant weakening in the economy with negative payrolls, we think the housing recovery can continue. The combination of low inventory, high affordability and improving expectations for home prices provide powerful momentum for the housing sector.”

The National Association for Business Economics (NABE) was recently quoted in HousingWire as reporting:

“While gross domestic product is expected to be negatively impacted by all the uncertainty surrounding the nation’s impending debt ceiling debate and the risks of sequestration, the housing sector is expected to continue its upward trajectory.”

Housing has been a tailwind to the overall national economy for over a year. We agree with the experts in the belief that this will continue moving forward.

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