The US housing market is surging again after years of historic declines, and the unique forces powering its return could last well into 2013. The number of homes for sale is at its lowest level since before the recession, sparking competition among buyers that has led to 10 straight months of price increases. The volume of activity is the highest since 2007.
Builders broke ground in December on the most new housing developments in four years.
Interest rates on mortgages are expected to remain near all-time lows through much of the year, galvanizing once-skeptical buyers. Together, those factors have helped the beleaguered housing market regain its footing and emerge as one of the economy’s bright spots this year.
Industry experts caution that the market’s recent strength does not signal a return to the heady days of the housing boom. Nearly 11 million homeowners are still underwater, owing more than their homes are worth, and prices remain well below their peak in 2006. Government data showed a larger-than-expected drop in the pace of home sales last month. The Federal Reserve has begun debating when to withdraw support for the mortgage market, and economists expect interest rates to rise before the end of the year, potentially tempering demand. Source: CHINA SECURITIES JOURNAL