Housing Crisis May Be Near Bottom, Home Depot Says

Atlanta, GA, Oct. 6, 2008--While it appears the housing crisis hasn't hit bottom yet, the end is in sight, at least if you adhere to how Americans have behaved in the past, according to Home Depot experts.

"We can see the bottom," said Carol Tome, chief financial officer for the Atlanta-based company in an interview last week with the Chicago Tribune.

The home improvement chain gauges market conditions by measuring private residential investment as a percentage of gross domestic product. The rate stands at 3.5 percent today. That is below the 4.8 percent average from 1948 to 2008, but still above the 3.2 percent low reached in the second quarter of 1982, when the country was in a severe recession. The high was 6.3 percent in 2005.

Of course, there is always the chance that the rate could reach a new low. But, economist Scott Hoyt is in the same camp as Tome.

"Clearly, if we have a prolonged recession, that could change," said Hoyt, senior director of consumer economics at Moody's Economy.com. "But we do think housing markets are nearing a bottom, particularly in terms of construction-related activity. That doesn't mean they're going to turn up real fast, but they're low enough that they won't go too much lower."

For now, Tome said she sees consumers focused on repairing their homes rather than remodeling.