You Can Breathe Now
by Evan Vanderwey on 24/08/09 at 9:39 pm
The first encouraging news from industry pundits were the bottoming-out numbers, making the case that a recovery may be imminent. Then we started reporting actual increases in key stats, also very encouraging, but we did it with words like cautious, optimistic, and wait-and-see. But the latest numbers represent longer-lasting trends and are good evidence of a sustained recovery.
Let’s look over these latest stats and just breathe deep for a minute…
- Single-family starts and permits up. The most depressed segment of the real-estate industry over the past two years, homebuilders, are pulling permits again. Single-family starts are up almost 2% and at the highest levels since last October. Permits for single-family construction are up 6%. That’s 6 of 7 monthly increases for 2009 (March showed a slight downturn).
- Mortgage apps jumped 4% for a 3rd straight week of increases. The recent drop in rates should see this statistic holding.
- Pending home sales index shows an increase for the fifth consecutive month, the first such streak in six years. A still-glutted inventory will feed this trend for a while.
- NAR’s Housing Affordability Index has the Midwest at a whopping 188, down from an incredible 206 for last month. (The HAI is set against a value of 100, which means that a median-income family can exactly qualify for a mortgage on a median-priced, single-family home. A value of 200 means the same family could “afford” twice as much home.) We need to be careful with this one: affordability is being driven—the larger part of it, at least—by the record number of short sales and foreclosures. So it’s great for buyers, but not a great sign of overall economic health. Look for this one to slip back as the next indicator, home prices, improves…
- Home prices nationwide are on the rise. This is one economic indicator that everyone wants to see rebound as it’s our best sign that the market as a whole is on the mend. Great housing affordability is fine, but no business thrives by holding an indefinite fire sale.
So the encouraging news is beginning to show some consistency to it. And though we’re still being warned that we may bounce along at these levels for some time, still, there’s a sense that we can, at last, stop holding our breath.
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