The housing market's rebound is gaining
strength as foreclosure sales slow and more people who are not in
financial trouble put their homes on the market.
New signs are adding to recent evidence of housing's upward momentum:
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Existing-home sales in August were the strongest since May 2010. They
rose 7.8% last month to a seasonally adjusted annual rate of 4.82
million, the National Association of Realtors reported Wednesday.
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August housing starts, including houses and apartment buildings, rose
2.3% from July to a seasonally adjusted annual rate of 750,000, the
Commerce Department said Wednesday. Single-family home starts rose 5.5%,
reaching their best annual rate since April 2010. The pace of newly
issued building permits fell 1%, down from a four-year high in July.
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Home builders are getting ebullient. On Tuesday, the National
Association of Home Builders reported that builders' confidence is the
highest since 2006. The NAHB's list of 99 improving local markets now
includes hard-hit areas such as Jacksonville and Tucson.
Housing
prices have fallen so sharply that the ratio of home prices to incomes
is now near the average from 1985 to 2000, said Stan Humphries, chief
economist at real-estate web site Zillow.com. Factor in interest rates,
and house payments are 16% easier for today's average buyer than they
were for a decade and a half before the bubble, he said.
"Prices have gotten so low, and affordability so high, that buyers have come off the fence,'' Humphries said.
Wednesday's
data show that the supply of homes added to the market is rising, even
as foreclosure sales slow, meaning regular buyers and sellers are
gaining confidence, Moody's Analytics economist Celia Chen said. Demand
is growing even faster than new supply, putting pressure on prices, she
said.
The national median existing-home price
was $187,400 in August, up 9.5% from a year ago, the Realtors said. The
increase was the biggest since January 2006.
Stable
prices are bringing out buyers who hesitated while values were falling,
said Stephen Paul, executive vice president of Mid-Atlantic Builders in
Rockville, Md. His summer sales tripled this year, to 15 units from
five last year. Low downpayment mortgages backed by the Federal Housing
Administration are filling gaps remaining in private financing markets,
he said.
"We had our best summer in seven
years,'' Paul said. "If I'm selling in July and August, when markets are
in hibernation, people are looking to buy in a serious way.''
The
NAHB survey shows builders are more positive about the early 2013
market than they are about conditions now, association president Jerry
Howard said.
"Confidence and customer traffic -- the precursors to capital spending -- are very good,'' he said.
Housing
starts will reach almost 1.1 million next year, up from 780,000 this
year, enough to boost overall economic growth by 0.8%, Chen said.
Barclays economist Michael Gapen said a 1.5 million-unit market would be
healthy.
"We're about halfway back,'' Gapen said.
USA Today