Steady US housing recovery is boosting economy
Associated Press | Nov 19
The housing market’s recovery still has a long way to go. But for now, it’s helping prop up an economy that’s being squeezed by a global slowdown and looming spending cuts and tax increases. Joseph LaVorgna, an economist at Deutsche Bank, estimates that the housing recovery could boost U.S. economic growth by a full percentage point next year. That’s because a stronger housing market would mean more jobs, especially in industries like construction, and more consumer spending.
Housing recovery gains traction
Reuters | Nov 19
“The housing market is continuing to improve. It’s probably improving more than most economists were projecting earlier this year,” said Patrick Newport, an economist at IHS Global Insight in Lexington, Massachusetts.
Home sales up, inventory down: good for home prices and for builders
Christian Science Monitor | Nov 19
“The improvement in existing home sales … is being driven by the very favorable level of housing valuations and affordability,” says Paul Diggle, a housing expert at Capital Economics in London, in a report Monday. “Supply conditions in the existing homes market are even tighter than we had previously thought.” A wild card, for the months ahead, is whether and how politicians resolve the “fiscal cliff” of tax hikes and federal spending cuts that are scheduled to take effect in January. The cliff could send the US economy into recession (and thus derail a housing recovery), but most economists expect that Congress and President Obama will cut a deal in time to avert the worst effects.
Existing-Home Sales Rise in October with Ongoing Price and Equity Gains
Nat’l Assoc of Realtors | Nov 19
Sales of existing homes increased in October, even with some regional impact from Hurricane Sandy, while home prices continued to rise due to lower levels of inventory supply, according to the National Association of Realtors. Total existing-home sales1, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, rose 2.1 percent to a seasonally adjusted annual rate of 4.79 million in October from a downwardly revised 4.69 million in September, and are 10.9 percent above the 4.32 million-unit level in October 2011. Lawrence Yun , NAR chief economist, said there was some impact from Hurricane Sandy. “Home sales continue to trend up and most October transactions were completed by the time the storm hit, but the growing demand with limited inventory is pressuring home prices in much of the country,” he said. “We expect an impact on Northeastern home sales in the coming months from a pause and delays in storm-impacted regions.”
Builder Confidence Rises Five Points in November
Nat’l Assoc of Home Builders | Nov 19
Builder confidence in the market for newly built, single-family homes posted a solid, five-point gain to 46 on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI) for November, released today. This marks the seventh consecutive monthly gain in the confidence gauge and brings it to its highest point since May of 2006.
Record-low mortgage rates may lift housing
Dallas Morning News | Nov 18
Demand for residential real estate is also being propelled by more affordable properties, progress in the labor market and improving consumer sentiment. The data underscore what Federal Reserve Chairman Ben Bernanke called “signs of improvement” in the market, which is helping fuel the expansion as manufacturing cools. “Housing has definitely become a bright spot in the economy, while all the international-facing sectors are doing much worse,” said Yelena Shulyatyeva, U.S. economist at BNP Paribas in New York. The economy should sustain a “modest recovery” through year-end, she said.
Housing’s comeback looks real
MarketWatch | Nov 16
More than 100 economists polled by Pulsenomics for the real estate website Zillow expect the good times to roll. They foresee home price increases of around 2.3% this year, but also think residential real estate will continue recovering for the next four years.
Housing Dynamics over the Business Cycle
Finn E. Kydland, et al. | Aug 26, 2012
A well known feature of the U.S. business cycle is that residential investment leads and nonresidential investment lags GDP. We document that in most other developed economies both types of investment are, more or less, coincident with GDP. There is much more uniformity across countries, however, when residential construction activity is measured by housing starts: almost all countries in our sample exhibit housing starts leading GDP. In contrast, a strong internal mechanism present in most business cycle models produces residential investment occurring only after an increase in GDP, once enough business capital has been built up. Our empirical analysis points to mortgage finance as a potential reason why actual economies exhibit the opposite dynamics.