Housing Market Contiues to Go in Right Direction

Filed under: Market Comentary

According to two reports this week, economists are saying the news is continuing to look upbeat in the world of real estate! The lowest mortgage rates in history have definitely helped keep sales of previously owned US homes close to a two-year high in October. In addition, construction of new residences continues to bolster the economy.

The reports say that demand for residential real estate is also being driven by more affordable properties, progress in the labor market, and improving consumer attitude. Federal Reserve Chairman Ben S. Bernanke states these are “signs of improvement” in the market, and Yelena Shulyatyeva, US economist at BNP Paribas, says “housing has definitely become a bright spot in the economy” and the economy should have a “modest recovery” through the end of the year.

And, according to the National Association of Home Builders index, confidence among home builders is the highest since June, 2006.

Now, if there would be a bigger pickup in employment, the housing market would accelerate even more  according to home builder D.R. Horton, Inc. Another positive is that D.R. Horton, the largest home builder by volume, reported fiscal fourth-quarter earnings last week that were better than analysts’ estimates!

William Wheat, a chief financial officer, said, “What we’re seeing is improvement off of an extremely low bottom in the housing market. We’re seeing small amounts of job growth right now. We’re going to need to see more over the long term.” He also added that employment is the number one for housing demand!

According to the Labor Department, companies added 184,000 workers to payrolls in October (the most since February) which is definitely a step for increased housing demand.

Bernanke, reflecting on the recent past of the housing market with ‘historic levels of foreclosures,’ the ‘weakness in housing,’ and the ‘difficulty in recovering’ said, “It is encouraging, therefore, that we are seeing signs of improvement in the housing market in most parts of the country.”

So, there you have it from some very influential people in the business. From these important signs, it definitely looks like we are gaining momentum in the housing market and 2013 looks like it could be an outstanding year.

If you have any questions or comments, please feel free to contact me!


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