AP: Real Estate Sales Will ADD to Economic Growth in 2012: First in 7 Yrs

More good news is on its way in a recent report from the Associated Press this week.  After seven years of the real estate market nationwide being a drag on the overall economy, we seem to have turned the corner.  New numbers are creating the expectation that economic growth in the U.S. will actually be bolstered by housing.

Sales of resale and new homes have been gaining steam throughout 2012, and prices are now tracking right alongside.  We've seen more than 10 percent increases in home sales, and home prices are up 9.4 percent year-over year.

Builder confidence is up, and interest rates for consumer mortgages remain historically low.  Last week's average rate on a 30-year fixed rate loan was 3.62 percent, according to Freddie Mac.  The improvements we are seeing in Seattle real estate seem to be happening nationwide.

From the AP Report:

The housing recovery is looking steadier and more sustainable, which will likely add to economic growth in 2012 for the first time in seven years.

Purchases, construction and prices are gradually but consistently increasing, though they remain far below levels seen in a healthy economy.

Sales of previously occupied homes rose 2.3 percent in July from June to a seasonally adjusted annual rate of 4.47 million, the National Association of Realtors said Wednesday. Over the past 12 months, sales have jumped more than 10 percent.

New-home sales have been strengthening, too. Toll Bros., a builder of high-end homes, said Wednesday that it's enjoying its most sustained demand in more than five years.

The "evidence that the housing market is recovering … is fairly clear across a wide range of reports," said John Ryding, an economist at RDQ Economics, a forecasting firm. Housing "is now becoming a small positive for the economic outlook."

That's a big change for an industry that has been a major drag on the economy since the housing bubble burst more than five years ago.

Michelle Meyer, an economist at Bank of America Merrill Lynch, forecasts that home construction will add 0.2 percentage points to growth this year. That would make 2012 the first full calendar year in which housing has added to growth since 2005.

© Seattle Homes, LLC: - Sam DeBord, Managing Broker, Realtor
Coldwell Banker Seattle: Coldwell Banker Danforth & Associates
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Data Source: NWMLS - The Northwest Multiple Listing Service did not compile or publish this information.