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Housing: Rates Low, Starts Up: Is a Recovery at Hand?

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Mysteriously missing from the second presidential debate, housing is nonetheless among the issues most central to economy -- the downturn and the recovery. This week saw yet more more positive housing data, fresh off a report that foreclosures had hit a five-year low and positive remarks from the Federal Reserve's regional look at the economy last week. But our readers -- at least those who responded to our poll -- seem to be keeping their glee in check.

The Data

The reports continue to paint a rosier picture of housing. Housing starts jumped 15% and building permits increased by 12% in September, according to data from the Census Bureau released on Wednesday. And the National Association of Home Builders housing market index ticked one point higher to 41.

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"We're seeing a more robust housing sector than many other parts of the economy," said NAHB Chief Economist David Crowe in a release. "One of the reasons is we have finally begun to see on a national scale that house prices are picking up again."

The NAHB cautioned, however, about builder difficulties in obtaining credit, buyer difficulties in getting mortgage loans and inaccurate appraisals, among other things.

Related: The 'Mortal Enemy' of Home Prices: Excess Housing Inventory

Rates remain favorable:  The 30-year fixed rate edged down to 3.37%, from 3.39%, and the 15-year rate fell to a new all time record low, 2.66%, last week, according to mortgage giant Freddie Mac. See the chart below for a look at how rates have trended.

 

But fewer people are opting to refinance. The refinance share of the Mortgage Bankers Association's market composite index fell 5% last week. That offset a 1% seasonally adjusted rise in mortgage applications for new home purchases, bringing the total index down 4.2% for the week.


What Do You Say?

JPMorgan CEO Jamie Dimon said earlier this week that housing had turned the corner; we asked our readers how things were where they lived. Of the 137,559 people who responded, 5% agreed with Dimon. The rest were divided between "things are improving modestly" and "it's still a mess" -- 47% and 48% respectively.

We asked readers on Wednesday whether they felt the American economy was strong again. Of 101,855 people who responded, just 6% said "yes we're back," and 13% said "yes, but unemployment is a big problem." The rest were split -- 38%/43% -- between "we won't be back until the jobs are back"and "no we're not even close."

What do you think? How important is housing to the economy? And how is housing in your area? Let us know in the comment section below!

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