"There have been numerous media stories out over the last couple of weeks about the recovery in housing at long last. Of course, this is the same housing bottom call that we heard in 2009, 2010 and 2011 – so why not drag it out again for 2012. Eventually, the call will be right and they will be anointed with oils and proclaimed to be the gurus that called the bottom. In the financial world you only have to be right once.
However, back on earth, where things really matter, housing is a major contributing component to long term economic recovery. Each dollar sunk into new housing construction has a large multiplier effect back on the overall economy. No economic recovery in history has started without housing leading the way. So, yes, housing is really just that important and we should all want it to recover and soon. The calls for a bottom in housing now, however, may be a bit premature as I will explain.
The Total Housing Activity Index shown here is a composite of the sales of new and existing homes, new construction permits for single family homes and new single family home starts. As you can see we are still near the same lows that we were in 2009 at the end of the recession. Furthermore, and what is really worse, is that the “recovery” was built on the bank of a whole slew of tax payer funded bailouts, tax credits and incentives from HAMP to HARP to the Home Buyer Tax Credit. Not quite the recovery the government was hoping for..."
However, back on earth, where things really matter, housing is a major contributing component to long term economic recovery. Each dollar sunk into new housing construction has a large multiplier effect back on the overall economy. No economic recovery in history has started without housing leading the way. So, yes, housing is really just that important and we should all want it to recover and soon. The calls for a bottom in housing now, however, may be a bit premature as I will explain.
The Total Housing Activity Index shown here is a composite of the sales of new and existing homes, new construction permits for single family homes and new single family home starts. As you can see we are still near the same lows that we were in 2009 at the end of the recession. Furthermore, and what is really worse, is that the “recovery” was built on the bank of a whole slew of tax payer funded bailouts, tax credits and incentives from HAMP to HARP to the Home Buyer Tax Credit. Not quite the recovery the government was hoping for..."
