Besides wages, one of the few missing ingredients in the US economic recovery has been housing. But things there are starting to change.
Slowly and steadily, single-family home starts are increasing
New data showed them at at fresh post-crisis peak in December.
Granted, we’re nowhere near levels of home building seen during the boom
But given how that ended, that’s probably a good thing.
But this is still a big deal for the economy
During the worst of the Great Recession, residential construction was a massive drag on GDP.
But happily, that drag has dissipated
And housing could be poised for a good run of healthy growth
Home prices are rising, but not surging.
US consumers are in better financial shape
The balance sheets of American households have healed up nicely.
Mortgage rates are still very low
Thanks to the Fed.
And people seem to be responding to them again
Refinancing, for instance, has jumped. And applications for home purchases are rising a bit.
Perhaps because consumers are feeling more optimistic
Consumer sentiment has been hitting post-crisis highs.
Which suggests that rates of homeownership might begin to rise once more
And they have plenty of room to run before we approach bubble territory again.