Forgive us for talking so much about good news lately, but after so many years of false starts, bad indicators, and ever-present dark clouds on the horizon, it feels good to be focusing in some persistent green shoots. So check out these bits of (record-setting) good news. According to the excellent Modeled Behavior economics blog:
From Bloomberg:
Housing construction permits climbed last month to their highest level since March 2010, according to Commerce Department data, as the near record-low mortgage rates lured some buyers into the market.
The future pace of consumer spending ultimately will be decided by the growth of household income, which in turn is tied to the health of the job market.
And there, Herrmann saw some reason to be optimistic. He forecast that private-sector payrolls would rise an average 160,000 per month for the rest of this year and by 200,000 per month in the first four months of 2012. Private payrolls increased 104,000 in October.
In a sign that the job market may be improving, claims for unemployment benefits dropped to their lowest level in seven months in the week ended Nov. 12, to 388,000, Labor Department figures released yesterday showed.
Though actually most of this is driven by Multi-Family investment. As long as Europe doesn’t destroy the world – and it very well may – I expect Multi-Family starts to be posting record highs by the end of 2012.
And I mean record, never before in American history will construction be started on so many apartment complex units.
Lots and lots of encouraging statistics there. If stats make your eyes glaze over, I’ll recap:
- The most construction permits issued in 18 months.
- Between 160,000 to 200,000 private sector jobs are expected to be added each month for the next six months.
- Unemployment claims dropped to a seven-month low.
- Record-high home construction starts are expected in 2012.
Of course, a record rebound like this wouldn’t be possible without a huge crash in the first place, so this doesn’t mean the housing environment is better than it’s ever been before. It’s just a bit of a trampoline effect.
Part of the problem is that the house collapse really did devastate livelihoods for families who lost jobs, couldn’t afford their homes, and couldn’t sell their homes in order to move to new jobs. You can imagine the giant drag on an economic recovery this would create. But a collapse of that scale also effects — and can be exacerbated by — those who didn’t actually lose their homes or jobs.
For example, Modeled Behavior also forecasts a similarly robust rebound in auto sales, which, while not directly related to housing, is also an important indicator when looking for signs of an improving economy. And it’s an indicator that is similar to housing — many Americans stopped buying cars following the economic crash not because they didn’t need them, nor necessarily that they couldn’t afford them. It’s just that in an environment of deep uncertainty that followed the crash, many still-employed families decided to hold off on buying that new home or new car until they felt better about their own financial future. Fear, confusion and uncertainty are market irrationalities that can grind an already-sick economy to a halt.
Thus the current high hopes for a robust rebound.
If you’re one of those families that’s in position to buy a new home, now might be a great time to seriously consider doing so before prices begin to rise again. We can help with a comprehensive line of Houston home loans, Dallas home loans, and Austin home loans. Similarly, if you’ve been waiting to renovate your home (say… expanding your garage for that second car you’ve been putting off buying), our Dallas home equity loans, Houston home equity loans, and Austin home equity loans are a great tools for doing so.