The Slow Road Back on Housing
Housing data released last week showed further improvement. Existing home sales were up 2.4 percent from November, and it was announced earlier in the week that housing starts were up 4.4 percent. Single family home sales are rising, but the real strength is in multi-family structures with five or more units, said Bob Hughes, senior research fellow at the American Institute for Economic Research. Housing is typically a leading indicator for the overall economy, but “because the last recession was housing based, it has not been the typical leading indicator it has been in the past,” he said.
Of the four regions reporting existing home sales, the West was up 9.8 percent in December, over November; the South, the largest region, was up 3.8 percent; and the Northeast and Midwest were both down. Hughes said one factor is that people are migrating to the South, for retirement or job opportunities, while the Midwest struggles with the shifting fortunes of the manufacturing sector.