The Invisible Boom

http://www.nytimes.com/interactive/2013/03/22/business/The-Invisible-Boom.html?_r=0

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"The truth is that you can spend your life any way you want, but you can spend it only once." (John C. Maxwell)

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Housing starts are rising at the fastest rate in more than 25 years. But, the level is so low that the gains are having only a minor impact on the economy: the number of new homes on the market remains at historical lows.

So, good news in the bad news. And, the direction is dramatically "up" for the good news.

Over the last 12 months, 551,000 single-family units were started, and an additional 255,000 multifamily units. As shown in the charts attached, that was an increase of 28% from a year earlier. That's good but it needs to keep going.

Some of the top economists from Moody's Analytics were in Dallas yesterday and their perspective was that the housing rebound will counterbalance the effects of the Washington budget problems and the European debt issues. They also indicated that Texas would "continue" to outperform the rest of the country when it comes to adding jobs and economic growth.

Moody's predicts that economic growth will remain modest nationwide in 2013 before ramping up next year. They are more positive about the economy in 2014 & 2015 in large part due to the housing market.

Mark Zandi, the Moody's economist most well known for having predicted the overheated housing market and the worldwide recession, now is very positive about housing and the economy. He says of himself that he is more "optimistic than the consensus" (of economists). He sees record corporate profits and a resurgence in the housing market as supportive of increased consumer confidence.

Now, we just need to watch the Fed. And, the Fed is watching the unemployment rate. Money stays "easy" until the unemployment rate gets down to 6.5%. Then, interest rates start up. We'll see what happens then.