Trends Headed in Right Direction

From RealTrends.com: Last week the U.S. reported that unemployment dropped to 8.6% a point not seen for the last two years and a rate not expected until later in 2012.  That is good news.  The not so good news is that only 120,000 net overall jobs were created far lower than the +200,000 needed monthly to offset gains in population.  Further it was reported that most of the decline was people dropping out of the search for a job.But this is the way they have chosen to measure unemployment for some time now so any decline is important, not the number itself but the fact that it dropped.  While the losses of jobs and income are real factors in when housing recovers, just as important is consumer confidence. And it is starting to head in the right direction as well, not only in the Consumer Confidence surveys but in the fact of a strong start to the Christmas shopping season and the strong rebound in auto sales, particularly SUV sales.

As we have pointed out, unit sales of the combination of new and existing housing have increased in high single to low double digit rates for the last four months (REAL Trends Housing Market Report, 2011).  Yes prices continue to decline.  Yes interest rates remain at record lows.  But an increase in jobs of any kind and an increase in consumer confidence will do more for housing than any other factor.