According to reports by the Census Bureau, nearly 65,000 new homes have been sold in the United States in 2012. Median home prices are expected to rise between six and eight percent from now until the end of the year. Mortgage delinquencies are decreasing at a promising rate as more underwater home loans are modified. The housing market recovery is certainly blooming, which means good news for other sectors of the economy as well.
Retailer Home Depot is on track to add 80,000 seasonal employees for its busy spring season; the company intends to reach out to veterans to fill many of these positions. Competitor Lowe’s plans to add 45,000 seasonal workers, plus 9,000 permanent employees to its payroll this year. According to statements made to NPR by Lowe’s, the company expects to see customers come to the store looking for items to help them with their home improvement projects.
Home Depot and Lowe’s are not the only businesses benefiting from the economic recovery of the housing market. NPR interviewed the owner of a small moving company in Maryland who is gearing up for spring as well.
The High Moving Season
Scott Gillis owns and operates a small moving business in Hyattsville, a suburb of the D.C. Beltway. Gillis is anticipating a busy season and is notifying all of his former employees. Years ago, Gillis mostly moved families from single-family homes to apartments. He is expecting to see a slight reversal this season.
Warmer temperatures and tax return checks entice families to move. In late January, the Los Angeles Times reported a spike in house hunters and mortgage applicants in California, Northern Virginia and Connecticut. Real estate agents expect more people will move into single-family homes in 2013 when compared to 2012.
A Positive Outlook
According to the National Association of Realtors, the housing market and its associated economic sectors could contribute 20 percent of the U.S. gross domestic product this year. The forecast for 2013 in term of the total value for the American housing market will be $3 trillion higher than in 2010. A Harvard University researcher interviewed by NPR remarked that such forecasts tend to be overly positive, but they bring an important psychological boost to the housing market.
Positive reports about the housing market tend to have a positive effect on the consumer economy. They create a spending momentum that spreads to various sectors of the economy; it is this momentum that has a greater flash effect on the markets.