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Wall Street Agog Over Housing Market 2015 Trends

Posted by JMLC on Jun 08, 2015 08:00 AM EDT

As the U.S. economy continues on its road towards full recovery, one of the major areas of growth has been the housing market. According to a report from businessinsider.com, the irony is it is the very same market that triggered the crisis that brought the U.S. and other countries to a global recession.

One of the clear signs that the housing market would be one of the major factors for recovery is the note recently penned by Morgan Stanley economists, among them Vishawanth Tiruppatur, who said, “Despite a weak first quarter on several fronts of the U.S. economy, the housing sector has been a source of relative strength. In our view, the U.S. housing sector is poised to accelerate into the spring, a traditionally strong period for housing.” The advisory added, “May was arguably the most positive month for housing data in quite some time, and Monday’s construction spending print was the cherry on the top.”

In another report from the Wall Street Journal, a new issue may be in the horizon, as families lack income or savings to be able to purchase homes, which would lead to an increase in renters, resulting in a housing shortage in the near future. While this may be very different from the subprime mortgage issue, one thing is reportedly the same: the lack of attention from Washington; either it’s blinded or refuses to act on the matter.

The current rate of homeownership is well below the level before then U.S. President Bill Clinton launched a campaign to encourage Americans to purchase homes. There is an issue now though, as the majority, about three in every four households, would be headed by minorities. This is an issue when it comes to income as they have lower average, leading to lesser ability to own homes. Should this continue, experts say the earlier report may be a short-term effect, but in the long term, the issues that beset the housing market would return and this time with a vengeance.