Slow but steady might be the best way to describe the housing market right now.
Groundbreaking on new home construction rose 2.3 percent last month to a seasonally adjusted; up almost 30 percent from one year ago. That was less than expected but still movement in the right direction.
“One of the things you see early on is positive expectations going forward and you’re seeing some of that in the homebuilders and house prices in many markets in many corners have turned a market,” says Ron Throupe, a real estate and construction professor at the University of Denver.
Homebuilder confidence jumped to a six-year high in September, and recoveries are underway in Northern California, New York, Pheonix and parts of Florida, just to name a few markets.
But it will likely continue to be a slow climb to a full recovery.
“I wouldn’t exactly break the champagne on that yet,” says housing analyst Dennis Yeskey. Mortgage lending hit a 16-year low and it’s harder than ever for folks to get a loan. Those lending rates, coupled with unemployment over 8 percent, wage stagnation, and other economic problems leave people cautious, he points out.
The headline number wasn’t as strong as many were hoping for, adds David Kelly Chief, global strategist for JP Morgan Funds. But if you focus on single-family housing starts, they went up by 5.5 percent. “There’s a lot more construction activity in a single-family home than in a multi-family unit,” Kelly says. “Overall, I think it’s reasonably strong.”
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