Oct
21


What is moving housing upward?

Sunday, October 21, 2012

 

For the first time in six years, the residential market is expected to add to U.S. economic growth in 2012. New home sales are up 28% from a year ago and new construction is running 35% higher.
The long-awaited recovery in the devastated real-estate market was a long time coming, but it finally looks like it’s here to stay. Barring another recession, most economists expect sales and construction to continue to rise steadily over the next few years.
And that’s good for the U.S. given the widespread — though diminished — impact that the industry has on the broader economy.
The government this week will release the latest monthly report on new home sales as well as growth figures for the third quarter. Both are expected to show improvement, with housing contributing significantly to gross domestic product.
Sales of new single-family homes, whose figures are released Wednesday, are projected to rise 2% in September to an annual rate of 380,000 vs. 373,000 in the prior month.
While that may not sound like much, it’s 24% higher compared to the modern record low of 306,000 new homes sold in 2011. What’s more, new construction and permits to build additional houses are climbing much faster.
Last week, for example, the government reported that housing starts and permits both soared to the highest level in four years. The more important forward-looking number, permits for single-family homes, rose 6.7% to a 545,000 annual rate.
Super-low interest rates is one key factor driving sales higher. So are a slowly improving economy and gradual increase in employment, which enables more people to afford homes.
Perhaps the biggest wind at the back of the housing industry is pent-up demand. A whole lot of people put off buying a home for a whole lot of years because of the depressed economy. Sooner or later they will have to dive in, especially if they plan to start a family.
Population trends make it a virtual certainty. Every year, the U.S. population rises by nearly 3 million people. And until the severe 2007-2009 recession, new households formed at a rate of about 1.3 million to 1.5 million a year.
For the first time in six years, the residential market is expected to add to U.S. economic growth in 2012. New home sales are up 28% from a year ago and new construction is running 35% higher.The long-awaited recovery in the devastated real-estate market was a long time coming, but it finally looks like it’s here to stay.

Barring another recession, most economists expect sales and construction to continue to rise steadily over the next few years.And that’s good for the U.S. given the widespread — though diminished — impact that the industry has on the broader economy.

The government this week will release the latest monthly report on new home sales as well as growth figures for the third quarter. Both are expected to show improvement, with housing contributing significantly to gross domestic product.

Sales of new single-family homes, whose figures are released Wednesday, are projected to rise 2% in September to an annual rate of 380,000 vs. 373,000 in the prior month.

While that may not sound like much, it’s 24% higher compared to the modern record low of 306,000 new homes sold in 2011. What’s more, new construction and permits to build additional houses are climbing much faster.

Last week, for example, the government reported that housing starts and permits both soared to the highest level in four years. The more important forward-looking number, permits for single-family homes, rose 6.7% to a 545,000 annual rate.

Super-low interest rates is one key factor driving sales higher. So are a slowly improving economy and gradual increase in employment, which enables more people to afford homes.

Perhaps the biggest wind at the back of the housing industry is pent-up demand. A whole lot of people put off buying a home for a whole lot of years because of the depressed economy. Sooner or later they will have to dive in, especially if they plan to start a family.

Population trends make it a virtual certainty. Every year, the U.S. population rises by nearly 3 million people. And until the severe 2007-2009 recession, new households formed at a rate of about 1.3 million to 1.5 million a year.

 






Comments subject to review.
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Estella said
"That is a beautiful shot with very good lighting ." about Women Consider Owning a Home to be a Vital Component of the American Dream
on Sunday, May 12, 2013 @ 9:57 AM

Chris White - Team Leader said
"Unfortunately you are not alone. It's more than an outcry. The powers that be really need to come down harder on Bofa than they already are. Working on these short sale for over 2 years now I've uncovered down right fraud happening on the lenders parts. If they cared more about moving this country forward than protecting their own wallets then they would cut the red tape and approve these short sales in a timely manner. Our team made the wise decision to get BofA loans which were FHA or Freddie Mac backed, approved prior to listing on the market. Then we can list the home as "Price Approved" and close in 30 days. In this instance BofA does a full appraisal, rather than an incompetent "Broker Price Opinion" (nothing against agents but they have no idea how to make adjustments on comparable homes) and then the bank issues an "Approval To Participate" letter which dictates what price we can go on the market and take anything north of 88%. I really do hope your situation improves. " about Congressional Bill to Speed Up Short Sales
on Tuesday, August 30, 2011 @ 9:15 AM

Lisa Zeiner said
"We made an offer 4 months ago to BofA, and have heard nothing. It was a cash offer which is better than the zero money they are collecting now. And since the people don't care they are trashing the place, by the time BofA gets around to it our offer will be gone as the place is a mess!! Septic issues now, garbage being dumnped. All of this could have been avoided if BofA really wanted to correct their cash flow problem and sell these properties in a timely manner. They cry about cash but then do nothing intelligent to fix the problem" about Congressional Bill to Speed Up Short Sales
on Tuesday, August 30, 2011 @ 9:06 AM

Jones Ramirez said
"Thank you for the work you have done into this post, it helps clear up a few questions I had." about How do appraiser’s determine a homes value?
on Tuesday, April 19, 2011 @ 10:07 PM

HollyRobsonf said
"Hey - I am certainly happy to find this. great job!" about Bank of America to Offer Principal Reduction to Underwater Borrowers
on Wednesday, April 13, 2011 @ 6:45 PM