The housing market continues to show slow but solid improvement with single family starts rising by 3.2% from April on a seasonally adjusted basis. While I don’t believe that housing starts or building permits are the best indicators for housing recovering as those numbers are more indicative of new construction. The key to lifting housing prices is reducing the supply and that has been steadily happening across some of the more depressed, yet attractive real estate markets, such as Phoenix and Miami. Housing and construction were extremely important cogs to GDP growth prior to 2007, and as the market improves we could see economic upside driven by the improving housing market. Many acquisitions are being done by cash buyers but financing is available on strong credits. If the regulatory and political war against the banks slows down at some point boosting consumer credit, I think it is likely that the recovery in housing will accelerate. As pricing improves new construction will follow reducing the unemployment rate which is certainly what is needed in the United States. http://online.wsj.com/article/SB10001424052702303410404577464752659322254.html?mod=WSJ_hps_LEFTTopStories
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