Housing has mostly recovered, homeowners haven’t.
That’s the basic analysis we can give as the final rounds of Obama-era economic data arrive.
Sales of existing homes in the U.S. — they’re the bulk of home sales, as opposed to newly built houses — rose 2 percent in October from the previous month, according to numbers just released from the National Association of Realtors. The rise in October brought home sales to an annual rate of 5.6 million, that’s the fastest pace since February 2007, before the housing bust hit.
The eight years of the Obama administration amounts to a large economic contradiction. Obama’s presidency spanned some of the most volatile economic conditions since the Great Depression, brought on by the financial crisis and the Great Recession when he took over the White House.
But the Obama presidency also encompassed the longest period of job growth on record as well as steady, if unspectacular, economic expansion. Over the next couple months, as some of the last economic reports of the Obama presidency trickle out, we’ll take stock of what sort of shape the economy — and the people inside it — are in, before President Donald J. Trump is sworn in on Jan. 20.
Those contradictions are on display in the details of the U.S. housing market. Prices, construction, and values have all risen sharply since the worst of the housing bust. In fact, the rise in home values has created some $7.67 trillion in wealth since June 2011, when the value of U.S. residential housing hit a post-crisis low.
That’s good news. And the rebound in housing has done much to shore up consumer confidence, an important component in a country where consumer spending accounts for roughly 70 percent of GDP.
On the other hand, thanks to the foreclosure crisis, relatively tight lending standards at banks in recent years and some remaining post-traumatic stress from the housing debacle and forcelosure crisis that’s made some people leery of buying, homeownership is now at low levels not seen since the 1960s. The U.S. homeownership rate was 63.5 percent during the third quarter of 2016. During the peak of the housing boom, it reached 69 percent.
That matters because as more people find it difficult to buy a home, it means a smaller share of Americans are benefitting from that appreciation of the housing market. And that could explain why the mood among many Americans is out of step with generally healthy looking data.