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Tuesday, July 31, 2012

U.S. Housing Recovery Tested As Economy Tempers Optimism

U.S. Housing Recovery Tested As Economy Tempers Optimism

“We’re not afraid to roll the dice, to take a leap of faith on theU.S. economy,” Gray, 47, an insurance-company recruiter, said in a telephone interview. “Things are on the rebound, and we need to get off the sidelines.”
As the residential property market climbs back from the worst collapse since the Great Depression, homebuilders need more customers like the Grays for the industry to enter a sustainable recovery and help drive U.S. economic growth. While orders fornew homes are rising at the fastest rate in two years and housing may be a net contributor to the economy’s expansion for the first time since 2005, slowing job growth, tight inventories and a backlog of foreclosures threaten to put the brakes on a comeback.
“The gun is cocked with insane affordability,” Stan Humphries, chief economist at property-data provider Zillow Inc. (Z), said by telephone from Seattle. “The conundrum is why more people aren’t coming off the fence. Two things are keeping them on the sidelines: economic uncertainty, and the fear of falling home prices. And I think both of those have started to be reduced.”

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