Housing and the economy are interrelated. One's successes and defeats affect the other. And that's just what then National Association of Home Builders want you to know.
NAHB Chairman Bob Nielsen, a home builder from Reno, Nevada, says, "Home building is a key driver of the American economy. By generating economic activity including new income and jobs, purchases of goods and services, and revenue for local governments, housing—which has historically accounted for around 17 percent of the GDP—can put America back to work."
And right now, we need it. According to the U.S. Bureau of Labor & Statistics, the unemployment rate is around 8.8 percent, down 1.0 percent from November.
The NAHB says that income made from construction activity is then spent in the local economy. New houses earn local taxes. New taxes pay for teachers, police, and other services. It's an all around great scenario.
"The gap between actual home starts and what is required to fulfill America's future housing needs represents more than 3 million jobs," said Nielsen. "Restoring the health of the housing industry is a crucial first step in stabilizing our country's path to economic recovery."
For now, however, the housing market is still experiencing difficulties. The volume of foreclosures was down 13.86 percent in February from the month before, but it still makes up a large percentage of housing sales. Where are the hardest hit areas? The top foreclosure cities, according to RealtyTrac.com, are: Las Vegas, Phoenix, Los Angeles, Chicago, and Sacramento. And foreclosed properties average just $165,903 at closing.
It doesn't help that consumer confidence declined again in March. The Conference Board Consumer Confidence Index® found that "the sharp decline in confidence was prompted by a sharp decline in expectations. Consumers’ inflation expectations rose significantly in March and their income expectations soured, a combination that will likely impact spending decisions. On the other hand, consumers’ assessment of current conditions improved, indicating that while the short-term future may be uncertain, the economy continues to expand.”
The job market was still on their minds, however. And it's no wonder why. Among the major worker groups, the unemployment rate was highest for teenagers -- at a staggering 24.5 percent. Blacks had the next highest rate, at a high 15.5 percent.
But there is a silver lining. It seems that 15.1 percent of those surveyed felt that business conditions are "good". This is up almost 3 percent. And job growth was seen in the health care sector, which has added 283,000 jobs in the last year.
Time will tell whether a housing or jobs recovery comes first, but either way, one will help the other.