US home builder Lennar blew away earnings expectations Sep. 14, posting quarterly profits more than four times as big as this time last year. “The housing market has stabilized and the recovery is well underway,” CEO says, crediting—in part—rock bottom mortgage rates. The Federal Reserve is taking dead aim at boosting the US housing market via its third round of quantitative easing (QE), its effort to create money and pump it into the economy by buying bonds. This latest version of QE focuses on buying the mortgage-backed securities where almost all of US home loans eventually end up. And other key stats are looking hopeful: new home starts, sales of existing homes, the contribution of home-building to GDP growth, and the Case-Shiller index of house values have all been trending higher for a few months now (paywall). We may well be seeing the turn to this crucial component of the world’s number one economy. Stay tuned for a number of fresh updates on the state of US housing this week.
By Matt Phillips
This article is more than 2 years old.