This is really significant news. I know that it doesn’t feel like it but we are on the verge of a pretty big economic recovery if Congress doesn’t screw it up. All of the stars are aligning for a recovery in the housing sector and once you add in the recent news by the FED to buy up $80 billion in foreclosure mortgages by the end of the year and then another $40 billion per month until unemployment hits a certain target … you’re talking about being on the cusp of a significant housing recovery.
We got into this recession because of a huge housing crisis and we’re going to roar out of the recession because of the housing industry. It has taken years and years to move through the huge inventory glut of foreclosed homes but it looks like we’re finally seeing light at the end of the tunnel. When home builders start building more homes based off of increased projected sales …. you’re going to see values rise for existing home owners, an increase in new home salespeople and realtors … not to mention a large increase in construction jobs. And that is going to put the economy back in the driver’s seat.
Mark Perry has the builder confidence index #’s HERE:
“Builders across the country are expressing a more positive outlook on current sales conditions, future sales prospects and the amount of consumer traffic they are seeing through model homes than they have in more than five years,” noted NAHB Chief Economist David Crowe. “However, against the improving demand for new homes, concerns are now rising about the lack of building lots in certain markets and the rising cost of building materials. Given the fragile nature of the housing and economic recovery, these are significant red flags.”
Just last month the Wall Street Journal wrote that the prices for homes increased the most in 7 years HERE:
Home prices rose by their largest percentage in at least seven years during the second quarter, propelled by low inventories of properties for sale and high demand for bargain-priced foreclosures, according to two reports Tuesday. Prices rose by 2.5% in June from a year ago, and by 6% from the previous quarter, said CoreLogic Inc., a Santa Ana, Calif., data firm. The quarterly jump was the largest since 2005. Separately, Freddie Mac, which uses a different methodology, said home prices during the second quarter jumped by 4.8% from the previous quarter. That was the largest jump since 2004.”
Business Insider has a graph directly from the BLS which highlights the jobs problem specifically in the construction trade HERE. With government investments in infrastructure having fallen behind and the housing industry having had such a huge surplus of foreclosed homes … there was simply very little work for construction workers relative to the # of people looking.
Now consider all of that … and then throw in the recent action by the Federal Reserve specifically focused on the housing market HERE; an excerpt:
And it is significant action. The economy’s biggest private sector opportunity is the housing market. The FED announced they would purchase $80 BILLION in mortgage securities by the end of the year and another $40 billion per month until they get to a point where the situation is significantly resolved. This will help pump money in the system but it will also help clean up some of these residential foreclosure properties that are on the market dragging down everyone else’s property values. That is also significant because the #1 source of wealth for the middle class has been equity built in a person’s home. That IS the only major investment most middle class Americans actually make.
Time Magazine added this about the housing market in May 2012 HERE:
The best reason to shed your hard-won dubiousness is a report issued today by the The Demand Institute, a think tank jointly operated by the well-respected and non-partisan research organizations The Conference Board and Nielsen. The fifty-page study is definitively labeling 2012 the year of the housing bottom. It says:
“The double-digit increases in U.S. housing prices over the first half of the past decade proved unsustainable. But the freefall is over. The point has been reached where housing prices will start to climb, albeit at single-digit rates in most markets over the next five years.”
The report argues that the recovery will come in two stages. The first will be driven by rental demand. Over the past several years plummeting home prices have been coupled with rising rents, and this dynamic has made landlording very profitable. This is evidenced by the recent rebound of the apartment-building business. According to the report, “The only segment of the home building sector now showing clear signs of recovery is multifamily housing,” noting that housing starts for multi-family units have increased 54 percent in 2011 over the previous year.
Read more: http://www.classwarfareexists.com/home-builder-confidence-sees-largest-12-month-gain-in-history/#ixzz274NiytJc
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