No matter what indicator you look at, the housing market is improving. New and existing home sales are rising. So are home prices. Even foreclosures are declining. In the latest housing data release, the National Association of Home Builders Wednesday reported that the housing recovery has spread to 70% of the 361 metro markets tracked by an NAHB/First American index compared to just 3% in September 2011.
Fannie Mae, the government-sponsored enterprise which buys and packages mortgages into securities for investors, says its own survey of consumers shows increasing optimism about the housing market, and the broader economy.
“We ask one question that nobody else asks,” Chief Economist Doug Duncan tells The Daily Ticker. “Is it a good time to sell a house [because] five out of six people who buy a house have to sell one first. That’s been a steady climb month over month.”
And the rebound in housing “will be the support” for the broader economy, says Duncan.
Some analysts like David Stockman worry that the housing is forming another bubble financed once again by extremely low interest rates maintained by the Federal Reserve. Duncan says that could be the case in some selected housing markets where prices are rising at a faster rate than the local economy is improving and building exceeds demand, but it’s not broad based. He expects home price appreciation will slow as a result of some overbuilding.