U.S. Housing Heals Even As Its Damage Widens

December 20, 2011 / Russell Legato, Residential Property Analyst

The depressed housing market in the U.S. is showing some positive signs. Residential construction is set to expand in 2012 with one or two tenths of a percentage point in growth. It cannot be considered a surge certainly. However, it is the first upward movement since 2005.

U.S. Housing Heals Even As Its Damage Widens

The euro zone crisis continues to connote an impending drop into deeper recession. China saw a dramatic reduction in exports to Europe. Chinese foreign investments are also dropping. More news from Asia shows the Bank of Japan remaining stable after reducing expectations of growth in November.

There are 48 central banks around the world that cut interest rates in October, November and December. Banking officials consider the near future to be dismal. India and Brazil are at a standstill but not dropping at present. No economy in the world, from low-income countries in the third-world to wealthy Arab nations will escape the effects of current economic conditions.

Commodities are losing value, while the U.S. dollar is increasing due to investors seeking a safe harbor. The National Association of Home Builders sees optimism injected into the housing industry, with 162,000 new homes for sale, which is an all-time low.

There was a surge of home buying in April of 2010 due to a taxpayer credit. Then not much until now when it has shown a steady increase since June. The S&P Home Builder’s Index increased 20 percent. It will be a long path back to a healthy economy, but it is good to be on that path.

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