Housing: Is the upswing sustainable?

“The bidding wars are back,” said Les Christie in CNN.com. Almost overnight, “the nation’s major housing markets have gone from stagnant to sizzling.” In California, New York City, Boston, Washington, D.C., and Seattle, listings have generated intense bidding wars as homeowners scramble to buy “before home prices and mortgages rise.” That’s left the housing market in an “awkward ‘tweener’ phase,” with a big imbalance between supply and demand, said Jeff Culbertson, a Coldwell Banker executive in Southern California. Available housing inventories are still shrinking as potential sellers wait and new home construction “moves forward at a snail’s pace,” so don’t expect housing prices to falter in the near future.

That’s good news for the economy at large, said Christopher Matthews in Time.com. The housing sector has historically carried a “disproportionate burden” in leading the economy to recovery. And no wonder: A house is generally the largest purchase someone will make, and buying a home “usually necessitates other big-ticket purchases like furnishing and appliances.” And in many parts of the country, home construction is a prime generator of jobs. Despite the heat in some local markets, though, the national trend is just “modestly positive,” so don’t “expect a housing boom any time soon.”

It’s wise to “stay level-headed,” said Regina Lewis in USA Today. Early indications of a housing turnaround are no reason to throw caution to the wind. Nationally, home values are still 30 percent below their peak. If you want to sell in this environment, “be measured about investing in home improvement,” since you may not get the return you’re hoping for. Distressed sales are dwindling, contributing to the lowest home inventories since 1999. Finding a new home and securing a mortgage—even at today’s low interest rates—remains an uphill climb, so if you’ll need to buy after selling, “think ahead.”

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In fact, you may want to join the growing ranks of Americans “willing to embrace renting,” said Ann Carrns in NYTimes.com. A new survey has found that while many people would still like to own a home, “the overall appeal of renting compared with owning is changing.” Among adults surveyed nationwide, 57 percent believe that “buying has become less appealing,” and 54 percent say “renting has become more appealing.” It seems that “despite improving indicators,” Americans still aren’t convinced the housing crisis is over. With the majority of adults now believing “that renters can be just as successful as owners in achieving the ‘American dream,’” there are ample grounds to stay cautious about the future of the U.S. housing market.