The U.S. housing market has turned a corner. After crashing in 2008 and remaining depressed before bottoming out in 2012, prices have been rising again for two years.
Gallup's most recent housing survey found that 74 percent of homeowners' homes were valued higher than when they bought them, up from just 53 percent in the depths of the bust:
[Gallup]
And these newfound price gains are translating into newfound optimism. Fifty-six percent of individuals surveyed by Gallup now think house prices in their area will be higher in 12 months time. Americans haven't been this optimistic about home prices in several years.
[Gallup]
This is exciting news. House prices are an important bellwether of wider economic health, and their rise — even while the private economy continues to decrease its debt burden — signifies the beginning of a virtuous cycle. With house prices finally having bottomed out, homeowners will tend to begin to feel a higher degree of confidence about the economy. This is likely to boost consumer spending and business investment, raising output and further lowering unemployment.
The economic recovery, it seems, really is here.