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Housing Showing Positive Signs to Close 2011

A series of recent positive data on the US housing market has some analysts predicting strong growth at the beginning of the year. The market got good news this week on new home sales, existing home sales, housing starts, building permits and other housing-related factors as 2011 draws to a close. Home builder sentiment rose for the third straight month in December, and mortgage rates fell to their lowest levels on record. Together, these reports paint a picture of a long beleaguered housing market finally gaining some momentum in recovery.

Perhaps the most important sign for the market is the improvement in housing starts and building permit requests. Construction has been slower to recover than other segments of the economy, and considered a vital cog in the real estate machine because it effects other parts of the economy. According to the National Association of Home Builders, each new home built generates three full-time jobs and generates $90,000 in tax revenue. And that's just single-family homes, multifamily buildings and commercial buildings boost the economy even more.

Most economists agree that a real recovery in the housing market must start with construction. Building activity creates jobs, which strengths job security, increases consumer spending, and eventually leads to fewer underwater homeowners as prices begin to rise. Several of these trends are already happening, leading some of the more optimistic economists in the country to predict a much happier new year in 2012 for housing and the overall US economy.

December 23, 2011

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