The U.S. Housing Market, as we all know, took a huge tumble starting in 2006 and ending in 2009. It's no secret that the housing market has been rebounding as of late, but how strong is the rebound? Lets take a look at some powerful Federal Reserve Data to gage the current strength of the housing market. The graph below plots the S&P 500 in orange, the Case-Shiller 20 City Home Price index in turquoise, and the % change in the home price index over one year in grey.
The Case-Shiller 20-City Home Price Index bottomed out in January of 2012 and has since been on a solid run. The Index is up 21.5% from January of 2012 (137.22) to March of 2014 (166.7). It has increased in each of the past 21 times that it has been reported. Despite the great run, it is still currently 19% below its all time high of 206.61 from April of 2006. Will the current run push it to or past the all-time high of 206.61? Well, the % change of the index over one year has been strong as of late. It has been over 8% since Janury of 2013 and it topped out at 13.77% in November of 2013 meaning from November of 2102 to November of 2013 the Case-Shiller index grew 13.77%. It has since retracted to 9.25% growth. Let's look at more Fed data gage weather the index will continue to rise at a aggressive rate and approach the all-time high. The chart below displays total United States construction spending in grey and the % change it total construction spending over one year in turquoise.
Total Unites States Construction spending has increased in each of the past 10 months it has been reported. The % growth over one year has been bouncing between a 5 and 10% growth since 2012. Since the start of 2014, we have seen the line consistently over 8% which is a bullish sign for the economy.
The graph above plots Private Residential construction spending. This includes home improvements as well as the building of new houses. We are currently experiencing a very strong rebound of that index. The list below displays the data from January of 2012.
2012-01-01 256292 2012-02-01 261808 2012-03-01 264592 2012-04-01 269519 2012-05-01 276127 2012-06-01 281128 2012-07-01 285554 2012-08-01 286566 2012-09-01 297951 2012-10-01 277419 2012-11-01 296403 2012-12-01 298167 2013-01-01 314028 2013-02-01 317420 2013-03-01 318726 2013-04-01 323021 2013-05-01 331271 2013-06-01 334997 2013-07-01 324132 2013-08-01 323213 2013-09-01 340631 2013-10-01 340167 2013-11-01 346991 2013-12-01 355979 2014-01-01 359930
Conclusion. The housing market is on a strong rebound and there is no data to suggest a slowdown. I think that Home Price that will continue surging until we see some bearish data.
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