The Current State of the U. S. Housing Industry
The Housing Industry in the United States is in the worse condition it has ever been since the Great Depression. We have seen waves of foreclosures, short sales and continued drop in existing housing sales, as well as monumental drops in new home sales. Major lending institutions were bailed out by the federal government, but used the emergency bailout funds they received to shore up their balance sheets as opposed to loosening up credit requirements for potential homeowners.
After approximately five years in decline and three years since the Economic Catastrophe at the end of 2008, the Housing Industry has managed to level off its rapid decline and has recently showed some improvement.
The Best News in Eighteen Months
The announcement that brings a touch of optimism to real estate markets is the Housing Starts and Building permits which jumped to the best numbers since a year and a half ago. Some economists take this as an indication that the Housing Industry has reached its bottom and will begin to level off and eventually improve.
Housing Starts
Tuesday’s data also showed increases in new construction for single family residences which is the latest sign of an economic recovery that is dependant on substantial risks at home and abroad caused by the International Debt Crisis.
Joel Narhoff, Chief Economist at Narhoff Economic Advisors stated “Investors should take heart that if Europe doesn’t melt down and Congress figures out how to extend the payroll tax cut, the economy can continue to gain momentum”.
While too soon for optimism, we can take these numbers to be at least an initial indication that the Housing Crisis has a potential to right itself. This would be the best thing to help lead the U. S. Economy out of its current climate of despair.
