Can housing help boost the economy?

Posted By @ Nov 6th 2012 10:23pm In: Random Thoughts and Ideas

The Myrtle Beach real estate market has been seeing a lot of movement lately. Bidding wars have returned and houses that are priced well are selling quickly. This begs me to ask the question, could increased sales help to boost the economy again and lead us down a better path? 

According to NAR, "Several signs have pointed to a housing market in full recovery mode." “Higher sales, prices, and building, albeit modest so far, are a welcome boost as other drivers of the economy falter,” Reuters reports. Economists are hopeful residential investment could add two- to three-tenths of a percentage point to the GDP next year. An increase in housing-related jobs also may help give the economy a lift. We have seen an increase in this sector showing an average of 11,000 a month this year. In 2011, housing-related jobs had an average monthly decline of 1,000. "By early 2013, housing-related jobs are expected to increase to 30,000 a month as new-home construction rises," says Jim O’Sullivan, chief of U.S. economist at High Frequency Economics.

NAR also reports that an increase in housing related jobs could make housing a significant contributor to chipping away at the unemployment rate. According to an article in the most recent Realtor magazine online, analysts have estimated that the economy needs 150,000 jobs created a month to keep the unemployment rate steady. Housing may also help lift consumer spending, another important factor that needs to increase to give the economy a jolt. Real estate wealth can help, economists say.

As more home owners refinance into record low mortgage rates, you may find more households are willing to spend more freely than before.

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