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Group: Housing Outlook ‘Significantly Brighter’ Than Year Ago

According to ""Harvard University's Joint Center for Housing Studies,"":http://www.jchs.harvard.edu/ the key to the housing market recovery is job growth. ""What the for-sale market needs most is a sustained increase in employment to bring household growth back to its longterm pace,"" the Joint Center stated in its recent report, ""The State of the Nation's Housing 2012."":http://www.jchs.harvard.edu/sites/jchs.harvard.edu/files/son2012.pdf


Unfortunately, while the housing market relies on job growth, it itself is also a hindrance to job growth. ""[T]he persistent weakness in homebuilding has in itself hindered a strong rebound in hiring,"" the center stated.


While some market indicators are showing positive movement ├â┬ó├óÔÇÜ┬¼├óÔé¼┼ô multifamily starts rose 54 percent and home improvement spending rose 0.6 percent over the year in 2011 ├â┬ó├óÔÇÜ┬¼├óÔé¼┼ô single family housing starts declined 8.6 percent over the year, according to the study.

Construction jobs ├â┬ó├óÔÇÜ┬¼├óÔé¼┼ô once a strong sector of the economy ├â┬ó├óÔÇÜ┬¼├óÔé¼┼ô have sunk to levels not seen since January 1993. As of year-end 2011, construction and specialty contract jobs are 41 percent lower than their peak.

Furthermore, while the year ended with some improvement in jobs, ""total employment in the US is still lower than when housing starts reached a trough fully three years ago,"" according to the study.

The new year started with a 16.7 percent increase in home sales year-over-year, and residential fixed investment also sustained growth for two consecutive quarters at the end of 2011 and start of 2012, according to Harvard.

The rise in residential fixed investment is particularly significant because it is the sector that has traditionally led the economy out of recessions in the past. However, this recent rise is ""its first significant boost to GDP since the end of the Great Recession,"" according to Harvard's Joint Center for Housing Studies.

All things considered, the center's market outlook is ""significantly brighter than a year ago.""