Housing bounces back, at last

The next commander in chief will get a big fat inauguration present: A real estate sector that isn't moribund

Topics: U.S. Economy, Housing, Business, Government,

Housing bounces back, at last (Credit: AP/Steve Helber)

If we take housing prices as our benchmark, it’s been six years since the peak of the housing bubble. A lot’s happened since early 2006 — a globe-spanning financial crash, horrible recession, historic presidential election — but through it all, there’s been one constant: the U.S. housing market has been in a coma. Worse than a coma, actually, if you take into account the debilitating impact of millions of foreclosures and collapsing home prices. The damage that the collapse of the U.S. housing sector has wrought on the average American’s economic livelihood has been immense, possibly the single greatest factor oppressing American confidence and contributing to political unhappiness.

How’s that for some context with which to view three successive reasonably encouraging reports from the housing front this week? On Monday, the Census Department reported that new home sales had risen significantly in May — up 7.6 percent from April and an impressive 19.8 percent from May 2011. On Tuesday, the influential Case-Schiller index reported that average home prices had climbed in April – the first tick upward after seven consecutive monthly declines. And finally, on Wednesday, the National Association of Realtors reported that pending home sales in May were up 5.9 percent over April and 13.3 percent over May 2011.

This is all good news, pretty clear evidence that the housing sector has not only bottomed out, but has at long last started to get its legs under it and move forward.

That does not mean, however, that a new boom is under way, or that the economy will suddenly lurch into speedy growth. The best bet is that the housing recovery is going to be painfully slow for a long time, and there may well be some backsliding as homeowners who have stayed out of a depressed market start putting up their homes for sale and flooding the sector with new inventory.

But what it does mean is that whoever wins the presidential election in November will come into office facing an economic climate that will be substantially different from what Obama had to deal with for almost the entirety of his term. A gale force headwind will be missing. Instead of sucking the entire U.S. economy into a black hole, housing will actually be contributing to economic growth. If Romney wins, he’ll be one lucky ducky. If Obama holds on, he might actually get the breathing space to focus on moving the country forward, rather than scrambling to hold things together in the face of overpowering collapse.

Of course, there are plenty of other things to worry about that could stifle economic growth and make the next four years a downer for whoever occupies the Oval Office. But housing is a big, big chunk of the U.S. economy, and for now, it is on the mend.

Andrew Leonard

Andrew Leonard is a staff writer at Salon. On Twitter, @koxinga21.

More Related Stories

Featured Slide Shows

  • Share on Twitter
  • Share on Facebook
  • 1 of 17
  • Close
  • Fullscreen
  • Thumbnails
    John Stanmeyer

    Overdevelopment, Overpopulation, Overshoot

    Container City: Shipping containers, indispensable tool of the globalized consumer economy, reflect the skyline in Singapore, one of the world’s busiest ports.

    Lu Guang

    Overdevelopment, Overpopulation, Overshoot

    Man Covering His Mouth: A shepherd by the Yellow River cannot stand the smell, Inner Mongolia, China

    Carolyn Cole/LATimes

    Overdevelopment, Overpopulation, Overshoot

    Angry Crowd: People jostle for food relief distribution following the 2010 earthquake in Haiti

    Darin Oswald/Idaho Statesman

    Overdevelopment, Overpopulation, Overshoot

    “Black Friday” Shoppers: Aggressive bargain hunters push through the front doors of the Boise Towne Square mall as they are opened at 1 a.m. Friday, Nov. 24, 2007, Boise, Idaho, USA

    Google Earth/NOAA, U.S. Navy, NGA, GEBCO

    Overdevelopment, Overpopulation, Overshoot

    Suburban Sprawl: aerial view of landscape outside Miami, Florida, shows 13 golf courses amongst track homes on the edge of the Everglades.

    Garth Lentz

    Overdevelopment, Overpopulation, Overshoot

    Toxic Landscape: Aerial view of the tar sands region, where mining operations and tailings ponds are so vast they can be seen from outer space; Alberta, Canada

    Cotton Coulson/Keenpress

    Overdevelopment, Overpopulation, Overshoot

    Ice Waterfall: In both the Arctic and Antarctic regions, ice is retreating. Melting water on icecap, North East Land, Svalbard, Norway

    Yann Arthus-Bertrand

    Overdevelopment, Overpopulation, Overshoot

    Satellite Dishes: The rooftops of Aleppo, Syria, one of the world’s oldest cities, are covered with satellite dishes, linking residents to a globalized consumer culture.

    Stephanie Sinclair

    Overdevelopment, Overpopulation, Overshoot

    Child Brides: Tahani, 8, is seen with her husband Majed, 27, and her former classmate Ghada, 8, and her husband in Hajjah, Yemen, July 26, 2010.

    Mike Hedge

    Overdevelopment, Overpopulation, Overshoot

    Megalopolis: Shanghai, China, a sprawling megacity of 24 Million

    Google Earth/ 2014 Digital Globe

    Overdevelopment, Overpopulation, Overshoot

    Big Hole: The Mir Mine in Russia is the world’s largest diamond mine.

    Daniel Dancer

    Overdevelopment, Overpopulation, Overshoot

    Clear-cut: Industrial forestry degrading public lands, Willamette National Forest, Oregon

    Peter Essick

    Overdevelopment, Overpopulation, Overshoot

    Computer Dump: Massive quantities of waste from obsolete computers and other electronics are typically shipped to the developing world for sorting and/or disposal. Photo from Accra, Ghana.

    Daniel Beltra

    Overdevelopment, Overpopulation, Overshoot

    Oil Spill Fire: Aerial view of an oil fire following the 2010 Deepwater Horizon oil disaster, Gulf of Mexico

    Ian Wylie

    Overdevelopment, Overpopulation, Overshoot

    Slide 13

    Airplane Contrails: Globalized transportation networks, especially commercial aviation, are a major contributor of air pollution and greenhouse gas emissions. Photo of contrails in the west London sky over the River Thames, London, England.

    R.J. Sangosti/Denver Post

    Overdevelopment, Overpopulation, Overshoot

    Fire: More frequent and more intense wildfires (such as this one in Colorado, USA) are another consequence of a warming planet.

  • Recent Slide Shows



Comment Preview

Your name will appear as username ( settings | log out )

You may use these HTML tags and attributes: <a href=""> <b> <em> <strong> <i> <blockquote>