A lot has been mentioned recently about the housing market and how quickly it appears to be rebounding. It feels as if the entire country woke up in unison and decided to all go buy a house. Feels like 2006 all over again right?
Well, not so fast. It is important to understand where we are coming from and what the possibilities really are. The graphs below from Northern Trust tell an interesting story:
Behind the numbers of the existing sales also includes investors buying homes or blocks of homes to rent. That element further reduces the multiplier effect. And, finally, the drag on the economy of incredibly tight lending criteria means it will be a long time, if at all, that we get back to even 75% of the growth days.
Watch this closely, it is good to finally feel good, but don't get burned with unreal expectations.