3 Numbers That Point to A Housing Recovery

There’s been an avalanche of economic data pouring in the past week that provides more clarity about the U.S. housing market, which seems to be improving somewhat as 2012 beckons. Here are some of the key stats:

Foreclosures down since 2010. On Thursday, Lender Processing Services released its monthly look at the U.S. foreclosure landscape, and that look reveals a healthier market, at least on a year-to-year basis. LPS says foreclosures are now down 30% from their January 2010 peak, but adds that that could be just a lull in the action. It notes that “foreclosures in process” are still high, with foreclosures comprising 4.29% of all U.S. mortgages.

Unemployment down. The U.S. housing market depends heavily on the employment market. When unemployment is low, more money is flowing through the economy and consumers are more likely to buy and renovate their homes. Conversely, when the jobless rate is high, consumers grow anxious and put off any big housing decisions, and lenders are more inclined to snap their purses shut until the sun comes out again. This month’s number, released this morning by the U.S. Labor Department, showed the U.S. unemployment rate officially falling to 8.6%, as the private sector added 120,000 jobs to the U.S. economy.

Federal Reserve provides a mixed message for housing. On Wednesday, the Federal Reserve came out with its Beige Book, which measures economic processes in the U.S. from early October to mid-November.

First, the Beige report characterizes the real estate market as “sluggish,” but does note that, thanks to continuing low mortgage rates, refinancing activity is growing at a rapid pace (the average 30-year fixed-rate home mortgage sits at 4.16%, according to the BankingMyWay Weekly Mortgage Rate tracker – still a low rate in historical terms).

Going forward, the data should take a backseat as Christmas and the New Year grow closer. For the time being though, a quick tabulation of this week’s pluses and minuses shows that the economy is getting a bit healthier, and the housing market – for now, at least – appears to be following suit.