As the market continues to move slowly through this recovery, I like to focus on the positives from time to time as a reminder that we’re not just going to make it out of this mess; we are making it out of this mess.
We’ll call them glimmers of hope. Some of these recent news bits have been:
Foreclosure freeze thaws a bit
Bank of America and GMAC Mortgage each recently said they would resume some foreclosure proceedings that had come under scrutiny for alleged botched paperwork. This is good news because about a quarter of all home sales have been foreclosures. Resuming the process keeps this segment of the recovery moving.
Some movement is better than no movement, which is what was happening when the major banks each put freezes on foreclosures in the midst of investigations around the “robo-signing” mess.
Construction of new homes increased
New home construction slows down significantly when the housing market is slow. That’s because builders don’t want to flood the market with too much supply when there’s an obvious lag in demand. That’s why the latest news that construction of new homes increased a bit in September is a good sign for the overall market.
At the same time residential construction has increased, builder confidence has also inched up, which is another good thing. Despite the overall rise in confidence, though, officials at the National Association of Home Builders are still cautious about future conditions.
We still have a ways to go, for sure. But these two recent news items show that movement is continuing. We knew this half of 2010 would be difficult after the jolt from the home buyer tax credit faded. But no one predicted the foreclosure freeze and robo-signing debacle (which really does have the potential to stall our road to recovery for an unknown length of time). The major banks seem dead set on working through it as quickly as possible so that we can return to a more reasonable pace – and that’s good news for everyone.