The Financial Times reports this week that confidence among homebuilders has hit a six-year high following reports that sales of previously-owned homes are again on the rise:
After the five weakest years in its postwar history, the housing sector is starting to regain some vigour against a backdrop of record-low mortgage rates, a bottoming out of house prices and supply shortages in some cities.But strict mortgage requirements are continuing to hold the market back and it is not clear whether the current recovery will accelerate.“Residential construction activity is nowhere near the levels it was during the boom years, and it won’t return there for years. But at least the very worst is over for homebuilders,” said Teunis Brosens, economist at ING.
Unfortunately, this auspicious sign comes as the country is on the edge of a fiscal cliff that could swiftly push us back into recession. If the country hurtles off it, there’s little reason to hope that a modest housing recovery would be enough to cushion the fall.