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It seems like the US housing market is improving.
Those who are looking for reasons of weak economic growth should take a look at housing market. As sales and construction remain low, investments in housing estate made a positive contribution to GDP by 1.2% for 7-year period. After a recession in 2001, this level has been achieved during 3 years.
Activity in housing market grew during the latest period. A report on housing market for June shows a maximum level since 2007. The report was released on Thursday by NAR. Mortgage credit appliances for purchase of houses are rising in contrast with refinancing of active credit agreements. Housing starts released this week show that construction activity is recovering.
Moreover, JP Morgan’s experts note that building of private homes is in priority rather than building of flats. This means the Americans spend money for private houses and give up renting. It is a good event for economy and a reason is not only a profit for housing market. The main reason is the growth of spending that includes purchases from garden equipment to cars.
Realisation of houses both new and old is at the level of late 90s, when the rate of work-able people was one-fifth below the current rate. This means the housing market has a potential for recovering and gives an additional recourse to economic growth.