While the housing market is “bouncing off of the bottom” and now heading rapidly back up, home pricing continues to soar since it really had no other place to go but up after the market crashed in 2008. According to the S&P/Case-Shiller home price index, home prices recorded their biggest gain since February of 2006. Home pricing was also 12.4% higher in July than in July, 2012.
Article after article has been written regarding how current home pricing, home sales, new home sales, building permits, and new home construction are seeing numbers they have not seen since before the Recession. And the record dates to which they are referring are now going back to 2006 and 2007 when the real estate market was thriving and stable. To finally see these numbers which are on the rise compared to normal real estate market trends has home buyers and builders both breathing huge sighs of relief. Even cities with the biggest losses during the Recession are seeing a bounce back in home pricing this past year: Las Vegas prices: 27.5% growth; Los Angeles prices: 20% growth; San Francisco prices: 20% growth; San Diego prices: 20% growth; and Phoenix prices: 18.9% growth.
The NAHB (National Association of Home Builders) reported a steep increase in builder confidence in June, 2013, rising 8 points to top out at 52. Any number higher than 50 means that builders think the market is doing well; any number below that indicates a poor market (according to builders). As with other statistics which have been reported lately, this is the highest level of builder confidence since April, 2006.
Another number which is really good for the housing market is that 2.5 million Americans’ homes are now, no longer “underwater.” This significant number is good for the US economy because it means that with the sale or stabilization of equity of and in these homes, consumers will now have their money “freed up” to put back into the economy in the form of spending.
As of the latest quarterly economic report, US job growth has included a huge growth of jobs in the construction sector. Putting builders, contractors, and sub-contractors back to work will also stimulate spending in the economy, not only in the form of spending with builder vendors but also in retail spending. These numbers and figures as well as economic growth are just in time for holiday spending in the 4th quarter.
Despite the slow pace of economic growth, consumer confidence is on the rise, and our society in general seems to be grateful for the slightest signs of improvement after having our sometimes lavish and luxurious lifestyles put on a tight leash because of the Recession. Any signs of life will help stimulate the US economy.