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Housing crisis over - Carlyle

February 29, 2012: 3:45 PM ET
home construction

Things could finally be looking up.

Will the housing market finally improve in 2012? The Carlyle Group thinks so.

The influential private equity firm issued a report Wednesday entitled "A New Dawn for U.S. Housing," in which it forecasts that housing construction and renovation will boost economic growth this year more than most think.

Assets linked to the housing industry have outperformed the overall market since the end of September and have "significant room to appreciate," the firm said. Nearly 10% of U.S economic growth in the fourth quarter was attributed to outlays associated with construction and renovation.

For the five years ending in June, residential housing investment served as a drag on the economy, according to Carlyle.

The firm's forecast is rosier than some others. Moody's Analytics still forecasts that housing prices will fall for the next six to nine months, as the $26 billion mortgage settlement is implemented. While Moody's also feels housing is on the upswing, it cautions that any recovery is tentative and modest.

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About This Author
Tami Luhby
Tami Luhby
Senior writer, CNNMoney

Tami Luhby is a senior writer at CNNMoney and covers income inequality, state fiscal problems, unemployment, housing policy and other economic issues. Luhby previously covered personal finance for Newsday and banking for Crain's New York Business.

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