An Optimistic — and Realistic — Take On The Housing Crisis

I remember the moment my father asked me if a glass was half-empty or half-full. I thought as hard as my seven-year-old brain would let me before firmly deciding that the answer was hall-empty. He told me I was a pessimist, and to this day, that is how I have been viewed by those who know me best. Personally, I consider myself a realist.
Still, I have tried to point out the optimistic side of the Chicago real estate situation since I started writing for this website, a task that’s not always easy in this economy. Luckily, today, I have Diane Swonk to help.
Swonk is the Chief Economist for Chicago-based Mesirow Financial, and she has some optimistic ways to view the country’s current housing situation.
Swonk discusses these viewpoints in the April issue of Themes on the Economy®. Here are some of her highlights:

Diane Swonk
Diane Swonk

* “Housing affordability has hit a record high and is likely to stay there for some time to come. In fact, rents have now exceeded the marginal costs of home ownership in most major markets.”
* “Mortgage rates are expected to remain near historic lows, despite some upward movement over the course of the year.”
* “Income growth is expected to reaccelerate as employment rebounds.”
* Household wealth has rebounded from recession lows, especially for wealthy households.
* “Pent-up demand for housing is building, as many people still want to buy but have deferred the purchase of a home, either because they couldn’t qualify for a mortgage, or they expect prices to fall further.”
Swonk actually says in the video that she wishes she has more optimistic news and admits it will take most of this year for those positive factors to develop into an actual housing recovery.
“All is not bleak; there is still hope for housing, just not much for 2011,” she says. “We are still years, not months, away from seeing any sense of normalcy in this sector of the economy.”
Looks like she’s a realist just like me.
Click here to check out this video featuring Swonk talk about the housing market.
And try to remain optimistic.