The Wall Street Journal reported this week that the housing market has officially reached bottom. According to many real estate indices home prices are up, sales of existing and new homes are picking up and inventories of for sale homes have fallen dramatically. When added together this means that the US housing market has passed the bottom of the cycle.
Of course the decrease in for sale inventory is the driving factor in this equation according to the panel of economists reported on in the Journal. With the number of vacant homes is at its lowest point since 2006 the housing market has finally turned north.
However just because we have hit “bottom” there is still a long way to go for a full recovery. In particular, more than one in every four home owners with mortgages are still underwater. Also the shadow inventory of unsold homes and foreclosures still threaten the momentum of the recovery as well.
But this news of hitting bottom does mean that from this point on the United States housing market is unlikely to drag the U.S. economy down further.