More Evidence of a Bottom in Housing
We have been through one of the worst housing recessions in modern history. Have we reached the bottom? Some say yes while others say no. Some new statistics offer some hope to …
According to recently released data, U.S. housing starts have risen 30% from their all-time low in April ’09. In addition, building permits increased 38% over the same period. And not surprisingly, the Bloomberg index of home builders’ stocks bottomed last July and has since risen over 50%. The prices of home equity-backed securities are rising sharply. If this doesn’t add up to a clear picture of a bottoming in the residential construction market, we’re not sure what would.
To be sure, this “bottom” has taken almost a year to form, which makes it the longest-drawn-out recession bottom since data began to be recorded in 1968. Also, housing starts in the winter months are full of seasonal adjustment factors which may or may not accurately reflect underlying activity. But an increase of 30% in just under a year is pretty impressive nonetheless, and hard to chalk up to seasonal or weather-related vagaries.
With most signs pointing to an end to the worst housing recession in modern history and a clear beginning to a housing recovery, the widespread angst over the homes remaining to be foreclosed and auctioned off seems overdone. The recovery seems to be for real.
The true test will come now that tax incentives for buying a new home no longer factor in to the market.
What do you think? Do you share the optimism or do you think we are in for more of the same?
Remember that every market is local. What’s true in one area might not be applicable to another. To really find out what is happening in the St. Louis Real Estate market visit our Market Trends section or call Finding Homes for You at 636-386-0659.