The US housing market remains an enduring symbol of the 2008 financial crisis. But look around today, and you’ll see hints here and there that the business is getting healthier and the US recovery keeps chugging along.
And the houses that are getting built are actually getting sold. Americans bought homes at a 5.4 million-unit annual pace in May, the most since 2009.
One development that should put some wind in the housing sector’s sails is the return of first-time homebuyers to the market. Meanwhile, all-cash buyers, who represent a more investment-oriented force prone to the effects of bubbles and busts, are on the wane.
This might have something to do with the lending picture. During the recovery, banks jacked up their mortgage lending standards and left them there, keeping a lot of buyers from taking advantage of record-low mortgage rates. But now they’re making credit a little easier to get, which is likely to only help bring more people into the market.
That’s not to say that a full-throated real estate boom is upon us. Lennar, one of America’s largest homebuilders, is excited, but not too excited. ”This has been a slow, steady recovery that’s been defined by pretty shallow levels of production, and those shallow levels of production are creating short supply for a growing demand,” Lennar CEO Stuart Miller said on an earnings call in June. ”And we think that as we look ahead, this recovery remains fairly shallow sloped but consistent for a number of years to come.
In other words, while the market has finally regained its footing, the improvements will continue to come slowly, but steadily.