Happy days are here again for housing … sort of.
After more than a decade of boom and bust, a vital part of the U.S. economy may be finally returning to normal. That could be very good news for growth. Signs of stability include slower price rises and fewer sales of distressed properties.
“Home prices look roughly in line with their long-term norms and, very importantly, far fewer people are falling behind on their payments,” Jed Kolko, chief Economist at Trulia, the online real estate firm, says. “More and more the housing recovery depends on what happens in the jobs market.”
Foreclosures dropped sharply in July, falling more than 21% in the past year, says data firm CoreLogic. On a month-over-month basis, completed foreclosures were down by 8.5%.
“The stock of distressed debt continues to rapidly decline, especially in western states,” economist Sam Khater said.
True, the housing bust resulted in years of misery and broken dreams for millions of people. But others are starting to see their recent investment pay off.
“Based on current trends, the overall foreclosure inventory could trend down to as low as 500,000 homes by year-end, which is very positive news for the housing market,” Anand Nallathambi, president and CEO of CoreLogic, said.
After a slow climb back from the financial crisis of 2008-9, growth may be revving up.
After a bleak start to the year, the Commerce Department increased its previous estimate of U.S. output in the April-June quarter. The economy grew at a brisk annual rate of 4.2%, , slightly faster than expected. f
The upward revision supported expectations that the second half of 2014 will prove far stronger than the first half.
And there’s a little good news for motorists. Labor Day will be the cheapest holiday travel weekend in four years: “Mildly cheaper than last year, quite a bit cheaper than in 2012,” Tom Kloza, chief oil analyst at GasBuddy.com, told me.
Despite unrest in the Middle East, “We are producing about 3.1 million barrels a day more domestic crude in the United States than when the first Arab Spring took place,” he said.
U.S. gasoline demand has also been reduced by more fuel-efficient vehicles.