FHB Logo Facebook LinkedIn Email Pinterest Twitter X Instagram Tiktok YouTube Plus Icon Close Icon Navigation Search Icon Navigation Search Icon Arrow Down Icon Video Guide Icon Article Guide Icon Modal Close Icon Guide Search Icon Skip to content
Subscribe
Log In
  • How-To
  • Design
  • Tools & Materials
  • Restoration
  • Videos
  • Blogs
  • Forum
  • Magazine
  • Members
  • FHB House
  • Podcast
Log In
Building Business

Seeking a Satisfying Answer to the “Market Bottom” Question

By Richard Defendorf
  • X
  • facebook
  • linkedin
  • pinterest
  • email
  • add to favorites Log in or Sign up to save your favorite articles
The National Association of Realtors notes that about a third of the 160 metro areas tracked by NAR Research experienced an increase in employment over the 12-month period ending in June, although most of those markets saw gains of less than 1.0%.

Conversations about the housing market often converge on a few closely related questions, beginning with “Where is the market bottom?” and continuing with “If we haven’t seen the bottom yet, how much further can it realistically drop?” Homebuyers also might ask, “Given the current cost of credit, is it worth waiting for the market to drop, or should I buy now?”

An analysis published this week by the New York Times points out that there’s little political mettle for the federal government to spend more beyond the billions already spent on programs to stabilize the market, from tax credits to low-interest loans to mortgage modification programs. The story also notes that even members of the National Association of Home Builders don’t expect Congress to authorize a credit program big enough – one in the neighborhood of $25,000 per buyer – to boost the market in a significant way. 

 

“Our members are saying that if we can’t get a very large tax credit – one that really brings people off the bench – why use our political capital at all?” NAHB Chief Economist David Crowe told the paper.

 

The jobs lynchpin 

While there are still calls from other quarters, including William Gross, co-founder of bond-fund specialist Pacific Investment Management Company, to use government funding to refinance at lower rates mortgages the government owns or insures, the current political environment and the increased urgency to reduce unemployment may leave housing to find its footing on its own. 

 

But that doesn’t necessarily mean the housing market bottom will be found down a well all that much deeper than the one we’re in. Key factors in the calculations for market direction are, of course, employment and its considerable influence on consumer confidence, spending, and mortgage delinquency rates. Job gains during the first two quarters were, to put it kindly, evident but anemic. But if employment picks up at least modestly over the next few months – above 1.0% in major markets – it can help offset the temptation to default among current homeowners, many of whom, as the Times notes, have already seen their home equity drop an average of 30%.

 

In a purely rational terms, says Karl Case, the Wellesley economics professor and co-creator of the Standard & Poor’s Case-Shiller housing index, this is a great time to buy, even if prospective buyers aren’t feeling the joy of low rates and relatively low prices. Case’s observations, published last week by the Times, also were cited in a recent news release from NAHB.

 

Is there a political solution? We hope so

Part of the backdrop for buyer uncertainty, like the source of anxiety for homeowners, is the jobs market. The unemployment rate has been lingering stubbornly in the 9.5% range, and job gains are extremely hard fought. But unlike another major homebuyer tax credit, unemployment remedies are at least politically feasible, and among the best bets remaining for resuscitating other sectors of the economy, including housing.

 

The Obama administration’s proposed “infrastructure bank” and call for full-value tax deductions on new equipment (from September 8, 2010, through December 31, 2011) is already being leveraged as much for political advantage in the upcoming election cycle as for consequential policymaking on Capitol Hill. But the ideas give lawmakers a place to start. The hope is they go beyond acknowledging the urgency of the situation and, once the election is over, finally take concrete action.

 

As Case reminded readers in his Times story, expectations often turn out to be more important than you expect. “One important reason for the recent downturn is clear: The steady drip of bad news about the economy has sapped the confidence of buyers, sellers and lenders,” Case wrote. “And there is no understating the importance of expectations and confidence in this industry.”


 

Fine Homebuilding Recommended Products

Fine Homebuilding receives a commission for items purchased through links on this site, including Amazon Associates and other affiliate advertising programs.

8067 All-Weather Flashing Tape

Available in 2- to 12-in. widths, this is a good general-purpose flashing tape that sticks well to most things. It features a two-piece release paper, water-shedding layers, and good UV resistance.
Buy at Amazon

Affordable IR Camera

This camera is super useful for tracking down air leaks in buildings. The one-hand pistol grip arrangement frees your other hand for steadying yourself while maneuvering tricky job sites.
Buy at Amazon

Reliable Crimp Connectors

These reliable, high-quality connectors from Wirefy work on 10-22-gauge wire have heat-shrink insulation to keep out water and road salt.
Buy at Amazon

Sign up for eletters today and get the latest how-to from Fine Homebuilding, plus special offers.

Signing you up...

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
See all newsletters
See all newsletters

The National Association of Realtors notes that about a third of the 160 metro areas tracked by NAR Research experienced an increase in employment over the 12-month period ending in June, although most of those markets saw gains of less than 1.0%.

×

Get home building tips, offers, and expert advice in your inbox

Signing you up...

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
See all newsletters
See all newsletters

New Feature

Fine Homebuilding Forums

Ask questions, offer advice, and share your work

  • X
  • facebook
  • linkedin
  • pinterest
  • email
  • add to favorites Log in or Sign up to save your favorite articles

Log in or create an account to post a comment.

Sign up Log in

Become a member and get full access to FineHomebuilding.com

More Building Business

View All
  • Pros of Apprenticeship Programs
  • Hiring Entry-Level Employees
  • From Craft to Company: Starting Your Own Business
  • Best Practices for Home-Building Project Communication
View All

Up Next

Video Shorts

Featured Story

Tool Test: You Need a Drywall Sander

We tried out a range of rotary and random-orbit sanders to compare their dust collection, quality of finish, and user fatigue after hours of sanding.

Featured Video

Micro-Adjust Deck-Baluster Spacing for an Eye-Deceiving Layout

No math, no measuring—just a simple jig made from an elastic band is all you need to lay out a good-looking deck railing.

Related Stories

  • Podcast Episode 684: Masonry Heaters, Whole-House Ventilation, and Porch Flooring
  • Podcast Episode 683: Barndominiums, ERVs, and Radon Mitigation
  • Podcast Episode 682: Basement Flooring, Architectural Salvage, and HVAC Ducts
  • Fine Homebuilding Issue #331 Online Highlights

Discussion Forum

Recent Posts and Replies

  • |
  • |
  • |
  • |
  • |
  • |
View More Create Post

Highlights

Fine Homebuilding All Access
Fine Homebuilding Podcast
Tool Tech
Plus, get an extra 20% off with code GIFT20

Video

View All Videos
  • Podcast Episode 678: Live from the Builders' Show-Part 2
  • Podcast Episode 677: Live from the Builders' Show-Part 1
  • FHB Podcast Segment: The Best of the Fine Homebuilding Podcast, Volume 8
  • FHB Podcast Segment: Larsen-Truss Retrofit to Existing Stud-Frame House
View All

Fine Homebuilding Magazine

  • Issue 331 - June 2025
    • A More Resilient Roof
    • Tool Test: You Need a Drywall Sander
    • Ducted vs. Ductless Heat Pumps
  • Issue 330 - April/May 2025
    • Deck Details for Durability
    • FAQs on HPWHs
    • 10 Tips for a Long-Lasting Paint Job
  • Issue 329 - Feb/Mar 2025
    • Smart Foundation for a Small Addition
    • A Kominka Comes West
    • Making Small Kitchens Work
  • Issue 328 - Dec/Jan 2024
    • How a Pro Replaces Columns
    • Passive House 3.0
    • Tool Test: Compact Line Lasers
  • Issue 327 - November 2024
    • Repairing Damaged Walls and Ceilings
    • Plumbing Protection
    • Talking Shop

Fine Home Building

Newsletter Sign-up

  • Fine Homebuilding

    Home building tips, offers, and expert advice in your inbox.

  • Green Building Advisor

    Building science and energy efficiency advice, plus special offers, in your inbox.

  • Old House Journal

    Repair, renovation, and restoration tips, plus special offers, in your inbox.

Signing you up...

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
See all newsletters

Follow

  • Fine Homebuilding

    Dig into cutting-edge approaches and decades of proven solutions with total access to our experts and tradespeople.

    Start Free Trial Now
    • Facebook
    • Instagram
    • X
    • LinkedIn
  • GBA Prime

    Get instant access to the latest developments in green building, research, and reports from the field.

    Start Free Trial Now
    • Facebook
    • YouTube
  • Old House Journal

    Learn how to restore, repair, update, and decorate your home.

    Subscribe Now
    • Facebook
    • Instagram
    • X
  • Fine Homebuilding

    Dig into cutting-edge approaches and decades of proven solutions with total access to our experts and tradespeople.

    Start Free Trial Now
    • Facebook
    • Instagram
    • X
    • LinkedIn
  • GBA Prime

    Get instant access to the latest developments in green building, research, and reports from the field.

    Start Free Trial Now
    • Facebook
    • YouTube
  • Old House Journal

    Learn how to restore, repair, update, and decorate your home.

    Subscribe Now
    • Facebook
    • Instagram
    • X

Membership & Magazine

  • Online Archive
  • Start Free Trial
  • Magazine Subscription
  • Magazine Renewal
  • Gift a Subscription
  • Customer Support
  • Privacy Preferences
  • About
  • Contact
  • Advertise
  • Careers
  • Terms of Use
  • Site Map
  • Do not sell or share my information
  • Privacy Policy
  • Accessibility
  • California Privacy Rights

© 2025 Active Interest Media. All rights reserved.

Fine Homebuilding receives a commission for items purchased through links on this site, including Amazon Associates and other affiliate advertising programs.

  • Home Group
  • Antique Trader
  • Arts & Crafts Homes
  • Bank Note Reporter
  • Cabin Life
  • Cuisine at Home
  • Fine Gardening
  • Fine Woodworking
  • Green Building Advisor
  • Garden Gate
  • Horticulture
  • Keep Craft Alive
  • Log Home Living
  • Military Trader/Vehicles
  • Numismatic News
  • Numismaster
  • Old Cars Weekly
  • Old House Journal
  • Period Homes
  • Popular Woodworking
  • Script
  • ShopNotes
  • Sports Collectors Digest
  • Threads
  • Timber Home Living
  • Traditional Building
  • Woodsmith
  • World Coin News
  • Writer's Digest
Active Interest Media logo
X
X
This is a dialog window which overlays the main content of the page. The modal window is a 'site map' of the most critical areas of the site. Pressing the Escape (ESC) button will close the modal and bring you back to where you were on the page.

Main Menu

  • How-To
  • Design
  • Tools & Materials
  • Video
  • Blogs
  • Forum
  • Project Guides
  • Reader Projects
  • Magazine
  • Members
  • FHB House

Podcasts

  • FHB Podcast
  • ProTalk

Webinars

  • Upcoming and On-Demand

Podcasts

  • FHB Podcast
  • ProTalk

Webinars

  • Upcoming and On-Demand

Popular Topics

  • Kitchens
  • Business
  • Bedrooms
  • Roofs
  • Architecture and Design
  • Green Building
  • Decks
  • Framing
  • Safety
  • Remodeling
  • Bathrooms
  • Windows
  • Tilework
  • Ceilings
  • HVAC

Magazine

  • Current Issue
  • Past Issues
  • Magazine Index
  • Subscribe
  • Online Archive
  • Author Guidelines

All Access

  • Member Home
  • Start Free Trial
  • Gift Membership

Online Learning

  • Courses
  • Project Guides
  • Reader Projects
  • Podcast

More

  • FHB Ambassadors
  • FHB House
  • Customer Support

Account

  • Log In
  • Join

Newsletter

Get home building tips, offers, and expert advice in your inbox

Signing you up...

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
See all newsletters
See all newsletters

Follow

  • X
  • YouTube
  • instagram
  • facebook
  • pinterest
  • Tiktok

Join All Access

Become a member and get instant access to thousands of videos, how-tos, tool reviews, and design features.

Start Your Free Trial

Subscribe

FHB Magazine

Start your subscription today and save up to 81%

Subscribe

We hope you’ve enjoyed your free articles. To keep reading, become a member today.

Get complete site access to expert advice, how-to videos, Code Check, and more, plus the print magazine.

Start your FREE trial

Already a member? Log in

Privacy Policy Update

We use cookies, pixels, script and other tracking technologies to analyze and improve our service, to improve and personalize content, and for advertising to you. We also share information about your use of our site with third-party social media, advertising and analytics partners. You can view our Privacy Policy here and our Terms of Use here.

Cookies

Analytics

These cookies help us track site metrics to improve our sites and provide a better user experience.

Advertising/Social Media

These cookies are used to serve advertisements aligned with your interests.

Essential

These cookies are required to provide basic functions like page navigation and access to secure areas of the website.

Delete My Data

Delete all cookies and associated data