As real estate experts continue to debate when home prices will reach their bottom, a new report from Fannie Mae posits that it could happen by as early as next year.
Projected economic growth for 2012 is currently at a rate of 2.2 percent, and this could be enough to stabilize property values, the report said. But according to Fannie Mae vice president and chief economist Doug Duncan, consumers, rather than lending regulation and reform, are the important to housing market and economic gains.
"Consumers remain key to the overall outlook, as attitudes appear to be reaching a plateau after a few months of improvement early in the year," Duncan said. "Loss of momentum in labor market conditions, sluggish income growth, and decreasing saving rates suggest that consumers may need to moderate spending unless income picks up."
However, stagnant conditions were not totally unexpected. This is the third straight year that these indicators showed vulnerability during the spring, Duncan added. But with mortgage rates and home prices making the prospect of owning buying property very affordable to consumers, an expected surge in property sales in the coming months could help the market level out by 2013.