That's the message in a Wall Street Journal article a couple of days ago. They took a look at the economy as a whole and came to the conclusion that the worst may be over.
- Mortgage applications for purchases and refinancings have been growing steadily since last summer. This is an overall trend reported by the Mortgage Bankers Association which does a mortgage-application survey every week. As with any economic trend, you can't just look at what happened last week - you have to take the long view to understand trends.
- New home sales are picking up, and the trend has been continuing since July. This indicates that demand is stabilizing. There is still about a six-month inventory of new homes, but in July it was more than seven months.
Of course, this is good news for those of us who help people buy or sell a home, but it's also good for the overall economy. According to the WSJ article, the slumping housing market has been one of the biggest drags on the country's economic growth. A rebound in 2007 will benefit all economic sectors.
That sounds like a lot of optimism, but if you think about it, increasing home sales generate a lot of economic activity.
- How many people who buy a home also buy new appliances? Trucks carry those stoves and refrigerators from the factory to the distributor.
- What about all that new carpeting, paint, and the draperies for the windows?
- And then there's the landscaping, perhaps a new pool or deck, and the design professionals who stage the house for sale.
- And that's not even including the people directly involved in a transaction - the inspectors, lenders, appraisers, and title professionals.
It's easy to see how an increase in this one segment sets things in motion that help both local and national businesses of every size. Good for homebuyers and sellers, good for Realtors®, and good for the country as a whole.