America's "sluggish housing market" seems to be "regaining its footing", says Lucia Mutikani for Reuters. Housing starts and building permits soared to a 12-year high in August. New-home sales were up 7.1% from the previous month. Interest-rate cuts by the Federal Reserve, which feed through into lower mortgage rates, are boosting demand.
A speculative bubble in US housing was at the heart of the 2007 sub-prime mortgage fiasco that preceded the global financial crisis. Zack Guzman on Yahoo Finance notes that between 1997 and 2005 the median US house price rocketed 75% in real terms, as measured by the S&P CoreLogic Case-Shiller index. House prices then fell 33% and hit a nadir in the early 2010s. Yet as economist Robert Shiller notes, between 2012 and 2018 US house price have regained 35%. The US "is slowly returning to looking at housing as a speculative investment".
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
-
1,000 children hold over £100,000 in a junior ISA – how to grow tax-free nest egg for your childJunior ISAs can be a tax-efficient way to grow a nest egg for your child. We explain how they work
-
How to start investing: a beginner’s guideGetting started in investing is a great way to make your money work harder for you over the long term, as investments tend to outperform cash savings
