AEIdeas

The public policy blog of the American Enterprise Institute

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Discussion: (5 comments)

  1. 2012 was definitely the year of the housing recovery. The recovery will certainly continue during 2013.

    1. Steven Hales

      That was content free. Care to comment on the rate of household formation?

      1. The Unknown One
  2. Jon Murphy

    Just another thing:

    Housing starts in 2012 were 28.1% above 2011.

  3. Dave Thomas

    It is certainly a price recovery. You could even call it bubble re-inflation funded by the expansion of the federal reserve’s balance sheet from below $2.6 trillion to over $3 trillion in the last eleven months. Another factor in the housing price recovery is a steadily decreasing number of homes for sale. In the summer of 2010 the national housing inventory for sale was over 1.2 million units. In December 2013 the same inventory was well below 800,000 units. The banks are eating a lot of risk writing 30-year fixed loans at below 4% on this housing price recovery as well. I know the standard arguments they can lay this off, but bad debt is bad debt. Ultimately the American taxpayer is always on the hook for that bad debt through Fannie Mae, Freddie Mac, the FHA, and the Fed’s balance sheet.

    A final thought. The number of construction workers has been flat since 2010 at a level below 5.6 milllion workers. A real housing recovery would be supported by wage growth and job creation would it?

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