The economy keeps sending mixed signals. First we see progress in the energy sector leading to broader job growth in the economy as a whole, then we hear that rising energy prices are threatening to stop the recovery in its tracks. Now the pendulum is swinging back to the positive with some of the best news we’ve had in years: The housing market looks like it’s finally picking itself up. The Economist reports that with rising sales and the number of houses for sale approaching a normal level of six months’ supply, homebuilders’ confidence is returning to levels not seen since the beginning of the recession.It’s hard to overstate the importance of this news. Housing is up there with health care as one of the driving sectors of our economy, and the doldrums of the housing market have been one of the biggest roadblocks to recovery. But with a glut of unsold homes, record low mortgage rates (for the lucky few who can get them) as well as a sharp increase in rental costs, now is the best time in years to buy a house, and Americans seem to be getting the message.Sixty years of government policy have made the owner occupied single family home the center of gravity of the American economy. Troubles in the housing market, and a financial mess rooted in the secondary mortgage market first created the bubble and then the bust; a stable recovery in housing is a necessary though not quite a sufficient condition for serious economic growth.
Want to Help the Recovery? Buy a House
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