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Wednesday, May 10, 2017

Three Years Ago: Housing Doom and Gloom

by Calculated Risk on 5/10/2017 11:39:00 AM

Three years ago, there were numerous "doom and gloom" stories about housing. I responded with What's Right with Housing? written on May 6, 2014. I wrote:

The first mistake these writers make is they are asking the wrong question. Of course housing is lagging the recovery because of the residual effects of the housing bust and financial crisis (this lag was predicted on this blog and elsewhere for years - it should not be a surprise).

The correct question is: What's right with housing? And there is plenty.
Housing is a slow moving market - and the recovery will not be smooth or fast with all the residual problems. But overall housing is clearly improving and the outlook remains positive for the next few years.
What has happened since?

Housing starts are up 25% from March 2014 to March 2017.

New home sales are up 50% from March 2014 to March 2017.

Existing home sales are up 21%.

House prices are up 15% (Case-Shiller National Index February 2014 to February 2017).

Some day I'll be bearish again on housing, but not yet.  Clearly those bearish on housing in 2014 were wrong.