I don’t have to tell you that the housing market has been hit hard since the mortgage bubble popped in 2008. For Sale signs and stalled construction sites have become all too common across America. And with housing and employment so closely tied together, the market has been anxiously looking for signs that housing is on the rebound.
Now many analysts are expecting housing to turn the corner as we head into the fall, a time of year when the market historically picks up. They look at signs such as June housing starts, which came in at 754,000 on an annual basis, as a signal that housing will soon rebound. That’s a 6.8% jump from the prior month and puts permits for new homes at an annual rate of 812,000 units, the highest pace for new permits in almost four years. Confidence among home builders was also at its highest since September 2002 in July. Finally, rock-bottom rates on bank loans and the trend of more people getting approved for loans are providing incentives to buy a new home while cash is cheap.
Alternatively, there are still those who don’t expect any big changes in housing or the economy in the near-term. They point to the disappointing July housing starts report, which came in below estimates, at 746,000 units a year — a 1.1% decline from June’s more positive reading. Single-family home starts also fell in July, down 6.5% (though multifamily starts jumped 12.4%). And the continued economic weakness in the U.S. and the threat of the “fiscal cliff” up ahead are forces that could burden the housing market and make a strong recovery difficult in the second half of the year.
What do you think?