U.S. housing boom, take two
By Nick Taylor-Vaisey - Thursday, February 7, 2013 - 0 Comments
America’s housing prices are rising, making homeowners feel richer. And that’s good for the economy.
Across the United States, home prices are rising at an impressive rate, and increased residential construction was the biggest bright spot in an economy that contracted slightly in the final quarter of 2012. Even in Phoenix, among the hardest-hit when the last bubble burst in 2007, average home prices shot up 22 per cent last year. It was housing woes that sent the U.S. into an economic tailspin in 2008, and that market is now carrying the recovery. “A lot is riding on the continued upswing in the U.S. housing market to support a stronger U.S. economy this year and next,” says BMO Financial Group senior economist Sal Guatieri.
The housing market is so critical because as prices go up, homeowners feel richer. And that has a big ripple effect across the economy. People who buy homes—particularly new homes—spend more on furniture and appliances. Construction also creates jobs. Consumer confidence as a whole rises. It is what’s known as a “virtuous circle.” Guatieri says all these positive signs in the market should encourage banks to ease lending standards, a move that “would open the doors for many more potential homebuyers to get into the market, and would reinforce the housing market recovery.”
Any hint of a coming interest rate hike could heat up the market even more, as people rush to buy new homes while borrowing rates are still low. That would be enough to spark another U.S. housing boom. Some bloggers south of the border are even murmuring about the foundation for a new housing bubble. Such a bubble could be “born of tight supply and low interest rates,” says one post on the Economist website. The theory has no shortage of critics, who point out that it is far too soon to suggest prices have recovered enough from historic lows just last year to be talking about a bubble. “Most measures of valuation suggest that housing is very cheap across the U.S., even with prices rising significantly in some areas,” says Guatieri. “Affordability is still close to the lowest levels in at least the last four decades.” A perfect time to get in on the ground floor.
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Pending U.S. homes fell in August from two-year high in July
By Christopher S. Rugaber, The Associated Press - Thursday, September 27, 2012 at 11:02 AM - 0 Comments
WASHINGTON – The number of Americans who signed contracts to buy previously occupied homes…
WASHINGTON – The number of Americans who signed contracts to buy previously occupied homes fell in August from a two-year high in July.
The National Association of Realtors said Thursday that its index of sales agreements dropped 2.6 per cent last month to 99.2. In July, the index rose to 101.9. That was the highest level since April 2010, when the market benefited from a federal home-buying tax credit.
A reading of 100 is considered healthy. The index is 10.7 per cent higher than it was a year ago. The index bottomed at 75.88 in June 2010 after the tax credit expired.
Contract signings typically indicate where the housing market is headed. There’s generally a one- to two-month lag between a signed contract and a completed deal. Last month, completed sales hit a two-year high.
Contract signings fell in every region but the Northeast, where they rose 0.9 per cent. The sharpest drop was in the West, where pending home sales declined 7.2 per cent. That was partly because of fewer homes available for sale.
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New U.S. home sales dip slightly in August
By Martin Crutsinger, The Associated Press - Wednesday, September 26, 2012 at 10:21 AM - 0 Comments
WASHINGTON – Sales of new homes in the United States dipped slightly in August…
WASHINGTON – Sales of new homes in the United States dipped slightly in August from July but the median price of homes sold during the month rose by a record amount.
The Commerce Department says that new-home sales edged down to a seasonally adjusted annual rate of 373,000 in August, a dip of 0.3 per cent from July’s rate of 374,000. That had been the fastest pace since April 2010 when government tax credits were boosting sales.
Sales in August were up 27.7 per cent from the pace a year ago. But even with that gain, new-home sales remain well below the annual pace of 700,000 that economists consider healthy.
The median price of a new home jumped 11.2 per cent in August to $256,900, the biggest one-month gain on record.
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Case-Shiller index shows home price increase in 20 major U.S. cities
By Christopher S. Rugaber, The Associated Press - Tuesday, September 25, 2012 at 9:41 AM - 0 Comments
WASHINGTON – Home prices kept rising in July across the United States, buoyed by…
WASHINGTON – Home prices kept rising in July across the United States, buoyed by greater sales and fewer foreclosures.
The Standard & Poor’s/Case Shiller index reports that national home prices increased 1.2 per cent in July compared with the same month last year. That’s the second straight year-over-year gain after two years without one.
The report also says prices rose in July from June in all 20 cities tracked by the index. That’s the third straight month in which prices rose in every city.
Steady price increases and record-low mortgage rates are helping drive a housing recovery.
Prices in the Phoenix, one of the cities hardest hit by the housing bust, have increased 16.6 per cent in the 12 months ending in July. Prices in Minneapolis and Detroit have risen more than 6 per cent.
