The recovery of the housing market and economy has been slow and arduous. Legislators and leading economists alike know that housing is the key to helping jobs and Americans get back on their feet.
Federal Reserve Chairman Ben Bernanke recently spoke at the 2012 National Association of Homebuilders International Builders' Show and made some strong statements about the housing market and what has and has not happened in recent years.
"The economic recovery began more than two years ago, but it doesn't feel like much of a recovery for many Americans--certainly for those of you who depend on the housing sector for your living, as well as for the millions of others who have seen their home values plummet or lost their homes through foreclosure," he said.
Historically during recoveries we've seen that "resurgent" housing is what fuels employment and rising incomes.
Today's recovery efforts however are coming up again a number of actors that constrain demand. Bernanke added, "Household formation has been down, particularly among young adults.
High unemployment and uncertain job prospects may have reduced the willingness of some households to commit to homeownership. Availability of mortgage credit is an important constraint."
The housing market is on the move, however, albeit slowly. In the latest existing-home sales survey by the National Association of Realtors (NAR), sales showed promising movement for the month of January. This is the third gain in the past four months. Existing-home sales rose 4.3 percent for the month.
Lawrence Yun, NAR chief economist, said strong gains in contract activity in recent months show buyers are responding to very favorable market conditions. "The uptrend in home sales is in line with all of the underlying fundamentals - pent-up household formation, record-low mortgage interest rates, bargain home prices, sustained job creation and rising rents."
"The broad inventory condition can be described as moving into a rough balance, not favoring buyers or sellers," Yun said. "Foreclosure sales are moving swiftly with ready home buyers and investors competing in nearly all markets. A government proposal to turn bank-owned properties into rentals on a large scale does not appear to be needed at this time."
"Today's solid housing starts report indicates that builders are putting more of their crews back to work, and adds to the growing field of evidence that the overall housing market is gradually but consistently moving in the right direction," said Barry Rutenberg, chairman of the National Association of Home Builders (NAHB)
To continue to see strides in the housing market, though, Bernanke stands by his advice that we need to continue to develop and implement policies to aid the housing sector. "No single solution will be sufficient. But sustained efforts to address the many interlocking factors holding back the housing market will pay dividends in the long run."
