Housing on the rebound

So says WSJ economics columnist David Wessel.  The evidence, at least on the national level, is compelling: sales are up by 10% over a year ago, inventories are down to a more normal six months, and prices are ticking upward. 

Wessel is careful to point out that bottoming out should not be confused with happy-days-are-here-again.  Housing starts are more than 50% below the pace of 2002, which is well before the bubble days.  One in four mortgages is underwater.  Still, this qualifies as very good news.  Housing will not drive this or any other recoveries over the next 10 years.  But it if can stop being a drag that would be a big overall plus. 

The credit score divide

Today's WSJ has a report on how individuals with middle to low credit ratings are unable to refinance their mortgages.  On the one hand, this means that we are not getting as much economic bounce from 3-4% mortgage rates as we did in earlier recoveries -- and this is the main focus of the article which plays this an equity issue.  Expect to hear more of this in the election.

My take -- sure the stimulus from the Fed is being muted.  But didn't we got into this mess because too many people with low credit ratings got into houses they could not afford?  I don't think the real estate bubble worked out too well before, so why start another one?  Oh, there's an election.