It looks like there might be some good news for the U.S. housing market, according to a Sunday report by Reuters. For the first time since 2005, we might see a bit of growth in residential construction next year. This could provide a small boost to GDP in 2012. While it won’t be a huge push for the economy, it does suggest a slow, gradual improvement.
Analysts have pointed out several key factors that suggest the housing market could be turning around. Most notably, the supply of new homes is down to just 162,000 properties. If demand picks up, we might face a supply shortage next year. Additionally, the number of unsold homes is going down, which could help lift the market even more.
The National Association of Home Builders is also seeing signs of growing optimism. Their index has climbed over 20% in the last quarter, indicating a more positive outlook. Mortgage lenders are also slightly loosening their down payment requirements, which might encourage more people to buy homes.
There’s also an uptick in the construction of rental units, and this trend is expected to continue into 2012. However, for the economy to fully recover, other important factors need to align, like a strong job market, good income growth, and an overall positive economic environment. Right now, personal income isn’t growing fast enough to keep up with inflation. Without these crucial elements, the housing market might stay slow, even with lower mortgage rates and easier down payment terms.