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Housing Market Picks up Steam

The Wall Street Journal reports that home prices are rising at the fastest rate since the beginning of the housing crash. One data firm found house prices rising by 6 percent in the last quarter alone. Freddie Mac’s estimates are lower, at 4.8 percent, but this is still the fastest single-quarter increase since 2005. On top of this, Fannie and Freddie look set to post some of their first profits in years—another sign that the market for mortgages is thawing:

Rising home values helped lift Freddie to a $3 billion profit, its best showing since the mortgage-finance company was taken over by the U.S. government four years ago. Freddie’s larger sibling, Fannie Mae, which hasn’t yet reported second-quarter earnings, posted a $2.7 billion gain for the first quarter.

The main force behind the home-price gains appears to be a shortage of homes for sale. The number of properties on the market is down sharply from a year ago. Meanwhile, demand is up, as mortgage rates have dropped to their lowest levels in at least 60 years.

Part of the increase comes from banks processing foreclosed homes more slowly, decreasing the supply of homes for sale. But it’s always a good sign when Americans feel confident enough to spend more money on housing after a major crash. And because many families have made significant investments in their homes, a rising market means rising wealth for Americans as a whole.

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  • Kris

    Wasn’t Greenspan vilified and blamed by some for the housing bubble (and the previous bubble) due to his keeping interest rates artificially low? How fortunate that we are finally emerging from the ruins of that misguided policy!


  • Luke Lea

    Another dimension of the situation with the regime in China:

    The New Five Black Categories

    “During the Cultural Revolution, the five black categories referred to five political identities: landlords, rich farmers, anti-revolutionaries, bad-influencers and right-wingers.

    On July 31, 2012, a People’s Daily overseas edition editorial simultaneously called for internal reform and warned against U.S. efforts to undermine China from the grassroots. Netizens latched on to this passage in particular:

    With ‘Internet freedom’ as its slogan, they [the Americans] will attack ‘top down’ governance in order to push forward the traditional model of liberal democracy; through the use of ‘rights lawyers,’ underground religion, dissidents, internet leaders and disadvantaged social groups as the core forces, they will push for a ‘bottom-up’ approach to Chinese governance from the grassroots to lay a foundation for changing China.”

  • thibaud

    More evidence that the economy’s not getting worse, which is very good news for Team Obama. No wonder that Nate Silver now rates Obama a 74% bet to win in November.

    The London bookies agree: they have Obama at 2/5 odds, vs Romney at 2/1.

    In other words, the smart money now views Romney as a longshot.

    The popular vote may still be close, but it’s looking like Obama will win the Electoral College vote by a very comfortable margin. A huge margin, if Romney picks Ryan as his running mate.

  • Jim.

    If Americans see their houses as “wealth” — in any sense other than an investment to be paid off so they don’t have to pay rent or a mortgage in retirement — we’re right back to the same situation we had in 2006.

    Honestly, Via Meadia — LEARN SOMETHING about the recent past, or we’re going to repeat it!

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