Yesterday, Bank of America Merrill Lynch’s economics team made waves when it completely revised its bearish call on housing, declaring that housing prices have hit bottom earlier than they expected.
Today, Michelle Meyer—a senior economist and housing specialist for the team—told Bloomberg TV that while it’s “a big call for the timing, it’s not a big call for the trajectory.”
“We do think that home prices are in the process of bottoming right now, but we do think that it’s going to be a very bumpy bottoming—one that lasts through the end of next year, and then you start to see home prices turn higher in 2014.”
What’s changed? Monthly supply of housing inventory has decreased, we’ve seen better economic data, particularly in job creation, and the policy environment is becoming more favourable towards a housing recovery.
“I think it’s the signs of life in the housing market. I’m cautious to get too excited right now because I think there are still a lot of challenges in the market,” Meyer explained. “Yes, you’re getting some marginal improvement, but it’s a long journey back to normal.”
Watch Meyer’s full interview below: