America Booming As Housing Market Hits Historic Milestone

Ever since Donald Trump was elected president, the U.S. economy has been on a decidedly upward trend as both businesses and consumers regained confidence that had been lagging since the 2008-09 recession. One key indicator of the booming economy is the hot housing market, which, according to the The Associated Press, saw a surge in home prices of 6.2 percent over 2016. That number comes from Standard & Poor’s national home price index, which noted in October that home prices were 6 percent higher than they had been at their peak in 2006. One drawback to the surge in home prices is that it has outpaced a slower growth in wages, meaning some would-be home buyers are struggling in certain markets to find homes they can afford at the moment, a trend that could disappear if the strengthening economy, corporate tax cuts and low unemployment spurs wage growth over the next year. Nevertheless, MarketWatch accurately predicted the booming housing market back in May by noting several specific data points that have since been proven correct. Those signs included growth in single- and multi-family home construction, a shrinking inventory of existing homes for sale, strong mortgage lending activity, a 10-year low on foreclosures, a low unemployment rate and a surge in confidence among builders. Figures provided by the U.S. Census Bureau and Department of Housing and Urban Development for the month of November would seem to back up those predictions in regard to the housing market’s growth. The agencies reported that nearly 1.3 million building permits for new private homes were issued in November, down 1.4 percent from October’s number of permits but up 3.4 percent from the number of permits issued in the same month in 2016. Likewise, a similar number of new housing construction projects begun in November was 3.3 percent higher than in October and an astonishing 12.9 percent higher than new construction starts in November 2016. The one number that fell from October to November, and was also lower than last year, was the number of new housing completions, though considering the surge in the other two factors in November, December’s report should see a rebound in new home completions. Of course, there are quite a few doom-and-gloomers making dire comparisons to the housing market bubble that precipitated the market crash that rocked the economy in 2008, who insist these surging prices and upward trend of new construction aren’t sustainable. However, at least some at Bloomberg aren’t among those naysayers, as the outlet predicted that the booming trend will only accelerate going into 2018. Bloomberg noted that the housing market is continuing to transition away from renter-occupied real estate to more owner-occupied properties, and more new single-family homes are being built compared to multi-family dwellings and existing home resales. Furthermore, with a rapidly improving economy, combined with increased confidence among builders and consumers, as well as an expectation of rising wages, more Americans are viewing the current era as “prosperous times” that suggest it is a good time to buy a home as an “investment” for the future. As for those who write off this growth in the housing market as a “bubble,” it is worth noting that housing made up roughly 3.8 percent of the GDP in the third quarter, lower than the 4.4 percent of the housing booms in the 1980s and ’90s, which suggests there is still room for the market to grow. Trump’s critics and haters don’t want to admit it, but his policies and the confidence that has stemmed from them are finally providing strength to an economy that lagged for years under the stifling policies of the prior administration, and we couldn’t be more thrilled about it.