Housing Finally Contributing to GDP

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Posted on 1st November 2012 by Grand_Homes in Homebuyer Tips |Homeowner Tips |Real Estate News

Business, Grand Homes, Real Estate, Texas Economy, Texas Real Estate, U.S. Economy

Friday’s report on U.S. economic growth confirms two emerging trends about the long-ailing housing sector: It is finally delivering a lift to the economy, but it is not delivering anywhere near the kind of boost that it traditionally has during a period of economic expansion.

Housing has now contributed positively to the nation’s gross domestic product in six straight quarters, which hasn’t happened since the housing bubble burst in 2006.

Residential fixed investment accounted for 0.33 percentage point growth in GDP during the third quarter, up from 0.19 percentage point in the second quarter and 0.03 percentage point in the year-ago quarter, the Commerce Department said on Friday.

Housing contributes to the economy in two key ways: the direct contribution to growth through home construction and improvements, and real-estate broker commissions, which is captured in the “residential investment” figures reported by Commerce.

But it also shapes consumer spending, through the so-called “wealth effect” (people may spend more when their homes rise in value because they feel richer, just as they might when stocks rise). Homeowners can also tap into the equity of their homes by taking out a home equity mortgage or through cash-out refinancing. (more…)

Housing Bust Over

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Posted on 13th July 2012 by Grand_Homes in Dallas Real Estate |Homebuyer Tips |Real Estate News

Grand Homes, Housing Market, Real Estate, U.S. Economy

The housing market has turned—at last.

The U.S. finally has moved beyond attention-grabbing predictions from housing “experts” that housing is bottoming. The numbers are now convincing.

Nearly seven years after the housing bubble burst, most indexes of house prices are bending up. “We finally saw some rising home prices,” S&P’s David Blitzer said a few weeks ago as he reported the first monthly increase in the slow-moving S&P/Case-Shiller house-price data after seven months of declines.

Nearly 10% more existing homes were sold in May than in the same month a year earlier, many purchased by investors who plan to rent them for now and sell them later, an important sign of an inflection point. In something of a surprise, the inventory of existing homes for sale has fallen close to the normal level of six months’ worth despite all the foreclosed homes that lenders own. The fraction of homes that are vacant is at its lowest level since 2006. (more…)

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