Has the housing market bottomed out? Most economists surveyed by the Wall Street Journal (44 out of 47) agree that it has. Housing price indexes are moving in a positive direction after the housing bubble burst nearly seven years ago.
But the market’s continued recovery is dependent on a few factors, suggests Barry Ritholtz, CEO and Director of Equity Research at Fusion IQ. The shadow inventory, homes that have yet to go through foreclosure, cannot flood the market. Second, consumers need to be able to qualify for mortgages. And third, household income needs to grow if Americans are to spend on housing.
Still, the recent numbers support the growing sentiment that housing has turned a corner.
- Nearly 10% more existing homes were sold in May 2012 than in the same month a year earlier.
- Inventory of existing homes for sale is at a 6-month supply.
- The number of vacant homes has dropped to its lowest point since 2006.
- Single-family home construction increased by 26% in May 2012 compared to one year earlier.
- Inventory of unsold newly built homes has fallen back to 2005 levels.