The bursting of the housing bubble in 2007 sent our economy on a downward spiral to dark economic times that have been hard to rebound back from. But the housing market is on track to turn the economy around. Home sales have rebounded to the strongest level in five years and show continue growth. Economists predict that there will be approximately one million new houses built in the coming year matching the twenty eight percent growth of 2008. Economists also say that demand for new housing is up as well. With a high demand and a tight supply economists predict that housing prices will increase about 3.7 percent.
Although this is good news for our economy the housing market is only a small piece of the pie. In order to fully achieve a full recovery we need to start see a drop in the unemployment rate and a serious growth in GDP. With all of this new construction underway economists say this will add roughly under a million jobs to our economy. This is good news and a great start to a long recovery that will take years.
I completely agree that a drop in the unemployment rate is the key towards a full recovery. The recent signs of recovery in the housing market have revived consumer confidence figures as well and they seem to be heading back to normal. The primary factor that pulls them down however, is the prominent unemployment throughout the country. These figures seem to also be rising but at a very slow rate.
ReplyDeleteIt is good to see that the housing market is on the rise and more people are in demand for houses. This is a great opportunity for construction companies, housing companies and real estate firms to increase their revenue. This is a great sign of recovery from the housing market and hopefully this recent improvement will allow different industries, like the ones I previously mentioned, to hire more people and potentially lower the unemployment rate.
ReplyDeleteI agree that the housing market makes up only a small portion of the GDP, but its improvement is definitely a good sign. In addition, it may be able to contribute to economic growth in other, less-direct ways. For example, by providing jobs for construction workers. This will allow these workers to have more disposable income, and hopefully cause them to spend more- increasing consumption. In addition, by reducing the unemployment rate, it may cause people in general to have more confidence in the economy, and further increase consumption.
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