It’s been a rough five and a half years for the American homeowner. At many points, pundits have erroneously called the “bottom” of the housing market. The American public can therefore be forgiven for eyeing the latest round of predictions that the market has turned a corner with skepticism. Of course, the housing market will heal at some point, so perhaps the boy is crying about an actual wolf this time. The best reason to shed your hard-won dubiousness is a report issued by the The Demand Institute. The study is definitively labeling 2012 the year of the housing bottom. It says: “The double-digit increases in U.S. housing prices over the first half of the past decade proved unsustainable. But the freefall is over. The point has been reached where housing prices will start to climb, albeit at single-digit rates in most markets over the next five years.” The Demand Institute believes the dynamics buoying the multifamily market – rising rents, low interest rates, and cheap real estate – are starting to boost the single-family housing sector as well. Perhaps most crucial to The Demand Institute’s vision for a recovering housing market is evidence that Americans are still strongly attracted to the idea of homeownership. [Read this article]

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Builders began work on more homes last month, evidence that the battered housing market is slowly healing. The Commerce Department said Wednesday that builders broke ground at a seasonally adjusted annual pace of 717,000 homes in April from March. That’s 2.6% more than March, which was revised higher. Construction rose for both single-family homes and apartments. Building permits, a gauge of future construction, fell last month from a 3½ year high to a seasonally adjusted annual rate of 715,000. But that was because of a 23% drop in the volatile apartment category. Permits for single-family homes rose almost 2%. The increase, along with rising builder confidence and stronger job growth, is a hopeful sign that the home market may finally be starting to recover nearly five years after the housing bubble burst. Builders have grown more confident since last fall, in part because more people have expressed interest in buying a home. In May, builder optimism rose to the highest level in five years, according to the National Association of Home Builders/Wells Fargo builder sentiment index. [Read this article]

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With rising rents, more renters are being swayed into home ownership, even in pricey housing markets like New York. For example, one New York renter said he started looking into owning a home when his landlord tried to increase his rent by 13 percent when his lease was up for renewal. He found that he could buy a home and get the same amount of space for cheaper than continuing to rent, plus he’d be building equity. Other renters are starting to see that buying may be a better option for them, too. Rents are increasing at about the same pace that home values are dropping, says Stan Humphries, Zillow’s chief economist, who says, according to their surveys, home prices have dropped 3.1 percent year-over-year whereas rents have increased 2.5 percent. ”Herein lie the seeds to eventually more interest in buying on the part of consumers, which will help put a floor under home prices,” Humphries told Investors Business Daily. Recent housing surveys, including Zillow’s, are showing home prices are starting to rise in recent months. ”That increased affordability in the face of rising rental prices will begin to get buyers off the fence this year,” Humphries says. [Read this article]

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The latest round of real estate data shows home-builder confidence soaring as U.S. homes become more affordable. In California, sales and prices appear to be on the mend. In a note on Tuesday, Ian Sheperdson, chief U.S. economist for High Frequency Economics, wrote that the improvements in U.S. housing could be a result of credit loosening. The lack of ready availability of home loans has been one of the stumbling blocks to a rising market, he wrote. “The key story here, we think, is improving access to mortgage finance, rather than the level of rates, which have been very low for a long time,” Sheperdson wrote, reacting to the rise in builder confidence. “After a credit event, availability of credit is the key to real recovery; housing is on the cusp.” The National Assn. of Home Builders reported on Tuesday that its index of confidence in the market for newly constructed single-family homes climbed to a level of 29, the gauge’s highest reading since May 2007. A separate index produced by the National Assn. of Realtors showed that U.S. homes reached a record level of affordability in the first quarter. [Read this article]

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Real estate agents, who spent the six-year U.S. housing collapse coaxing buyers off the fence, are now hunting for sellers as home inventories hover near lows last seen in 2005. A scarcity of properties signals the housing market’s uneven recovery as purchasers trying to take advantage of record affordability run up against homeowners choosing to stay put in properties that aren’t worth as much as they owe. “It’s a sign of transition from a slow slide down to what hopefully will be a solidly improving market,” said Susan Wachter, a professor of real estate and finance at the University of Pennsylvania’s Wharton School. “We’re not going to have a healthy market until we can have move-up buyers purchase homes and not simply stay in place.” The number of homes listed for sale in the U.S. fell 22 percent to 2.37 million in March from a year earlier. That’s a 6.3-month supply at the current sales pace. In April, inventories fell to less than a three-month supply in markets including San Francisco, Silicon Valley, Denver, Phoenix, San Diego, Los Angeles, northern Virginia and Seattle. [Read this article]

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Americans know more about credit than they did last year, but they’ve still got a lot to learn. The results of a survey released by the Consumer Federation of America revealed a jump in consumer knowledge about which companies collect credit information and how to check it, but a continued lack of knowledge about how costly low scores can be. A large majority of respondents knew who uses credit scores and that missed payments, personal bankruptcy and high credit card balances influence scores. They were also aware that they have more than one generic score and that making payments on time or not on time can raise or lower your score. But very few people who took the survey knew when a person’s credit score can be harmed by multiple inquiries when getting a loan. Few also understood what does and does not affect the score. [Read this article]

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Confidence among U.S. builders rose to the highest level in five years in May, a hopeful sign that modest improvement in the housing market will pick up. The National Association of Home Builders/Wells Fargo builder sentiment index rose to 29 in May. That’s the highest reading since May 2007 and up from a downwardly revised reading of 24 in April. The index rose for six straight months before falling in April. Homebuilders reported improving sales and higher traffic from prospective buyers. A gauge measuring confidence in sales over the next six months also rose, to 34 from 31. The improved outlook follows other recent signs that the depressed housing market is slowly improving. [Read this article]

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Americans’ emotional heath improved in April and, by a slight margin, is now higher than it has been in any month since Gallup and Healthways started tracking it in January 2008. Gallup’s U.S. Emotional Health Index score was 79.9 last month, slightly above the previous high of 79.8 recorded in March 2008 and May 2010. Americans’ emotional health has generally been improving since September, when it dropped to its lowest level in more than three years (78.3). These findings are based on approximately 30,000 interviews with American adults conducted each month from January 2008 through April 2012 as a part of the Gallup-Healthways Well-Being Index. Americans’ emotional health has generally been improving since September, reaching a four-year high of 79.9 in April. Americans are now less worried and stressed, and report having more enjoyment. These emotional changes coincide with growing confidence in the economy and improved standard-of-living perceptions. [Read this article]

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So long as the eurozone debt saga doesn’t spiral out of control, some housing-market observers are growing increasingly confident the tepid rebound the industry is now experiencing is legit. “We’re in the seventh year for corrections for housing and corrections don’t last forever,” said Russell Price, senior Priceseconomist at Ameriprise Financial. “I think we’re really coming to a floor for the housing market.” The stronger-than-expected yet choppy improvements in the U.S. economy in recent quarters may have finally planted the seeds for enough positive momentum in the housing market. While they are far from healthy and subject to frequent revisions, government labor indicators suggest the jobs market has improved, potentially giving consumers the courage to purchase a home. These upbeat developments should trickle down to the home-building sector as well. Proponents of this rosier forecast point to a slew of housing-related indicators that have begun to gradually improve. [Read this article]

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Well, 2012 may or may not be the end of the world as we know it, but one thing is perhaps certain: it’s the end of the ghastly price hemorrhages home owners have suffered since the real estate market crashed in 2007. Nationally, home prices have dropped about 35% since the housing bubble burst – in the hardest hits areas, 55% or more. Yet new reports from several real estate research firms signify that home prices are finally stabilizing. The data reinforces a notion already asserted by many an economist, real estate agent and Wall Street investor: that 2012 is the year of the bottom. The National Association of Realtors reports that in the first quarter of 2012, the median existing single-family home price, or final sales price, rose in 74 of the 146 metro areas that the association tracks. In the fourth quarter of 2011, only 29 metro areas had showed price gains. In other words 51% of the major cities across the U.S. have welcomed price gains, most notably in areas where  the energy industry helps fuel the economy and in snow bird retirement haven Florida. [Read this article]

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