Housing Crisis Turnaround in Sight: The Return of the Housing Market

After years of disappointing results from the housing market, some experts feel that a turnaround might be within reach. With the recent collapse of the housing bubble, America’s foreclosure rates and sales rates underwent a downward spiral. Only now does it seem that this decline has come to a standstill.

The culmination of the housing crisis is finally here. Some experts, such as those at Barclays Capital, have recently reported that home prices, which saw a fall of nearly a third in the period since 2007, could be back to prior peak levels by 2015. This is incredible news for a country just now slowly recovering from a difficult recession. Stephen Kim, a Barclays analyst, goes so far to predict a rise in housing prices of 5% to 7.5% a year.

Housing construction rates in the United States are predicted to be even stronger. Some experts feel that construction rates will see a 20% increase each year for the next two years. These same experts also predict that a million homes will be constructed per year by 2016. A return to these pre-housing bubble rates could give our nation the economic spark it needs right now. With the creation of new construction jobs, as well as the pick up in sales and income tax receipts, the United States could be in store for a significant increase in needed revenue.

With the return of the housing market, Americans should expect to see growth in all housing-related industries. From plumbing to roofing to drywall, jobs across industries will multiply, returning the nation to a position of strength. The most noteworthy aspect of the potential return of the housing market would be its ripple effect on the rest of the economy. As more houses are built, more construction workers, plumbers, electricians are hired. As a result, these employees are more able to earn enough money to buy a home of their own, thus creating more jobs. This powerful cycle would strengthen the entire economy. Roger Altman, chairman of Evercore Partners, believes that a housing market recovery could have enough impact to “lift the entire U.S. economy.”

An economic lift is surely needed by America’s troubled economy. With the potential return of the housing market, this is the exact news the nation wants to hear. As home foreclosure rates slowly stabilize and home construction rates rise, the United States will finally return to a position of strength.

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Michael Crovetto

Member of Cornell's Roosevelt Institute Chapter

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