Is the housing bust over?

Filed in archive mortgage news on July 30, 2009

A growing number of economists are joining the chorus: A housing recovery has begun.

To that, we can all add a hearty "Hallelujah!"

The latest economic type to opine that the housing recovery is now in progress is University of Chicago economics professor Casey Mulligan. In a column printed in the New York Times, Mulligan says that all the latest reports on housing starts, home sales and housing prices point to the beginning of a housing comeback.

Mulligan says that basic laws of supply and demand pretty much made a recovery an inevitability. For instance, the U.S. population has continued to grow. At the same time, homebuilders during the housing slump basically stopped building new homes. This leads to an increased demand. Sure enough, housing starts have finally begun to rise again.

As demand for housing increases, Mulligan says, we'll finally see housing prices stop their steep fall. This will lead to an eventual rise in national housing prices again. Mulligan does say, rightly so, that housing prices will not return to their 2005 levels. But that was the height of a very unsustainable period of housing-value appreciation.

Reading a column like this is a soothing way to start your morning. Much of my income is tied into the housing industry because I write for several publications that cover the mortgage and real estate businesses. I'm thrilled to see things finally start to improve.

Personally, I'll know that the housing slump is history once all those real estate trade magazines begin assigning me stories on a regular basis again.