New home sales in US and Canada.

With housing news good one day and bad the next, it’s hard for the public to know when the US housing market will really be on the road to recovery. The latest news from the US, suggests that Americans are regaining some confidence in the housing market. This is good news for Canadians even though our housing market did not suffer the same collapse as in the US.

The most recent positive housing indicator is the increase in US housing starts which rose 24 per cent in June 2012 from the same period in 2011. Canadian housing starts are showing steady positive gains as well with an increase of 9.9 per cent for the same period.

Another positive sign is the recent purchase of 2000 US foreclosed homes by American asset management and financial services company Blackstone Group LP, which will rent out the homes for now and sell in the future. The company says the $300 million dollars spent is an investment in the “housing turnaround”.

The median price of an existing home in the US also showed gains with an increase of 7.9 percent from June 2011 to $189,400. In Canada, average housing prices have been dramatically different depending on the region. From June 2011 to June 2012, the average house price in Vancouver had a dramatic decreased of 13 per cent to $701,141, however Calgary increased 3.66 percent to $441,634. Netting Vancouver out of the national average, the Canadian national average price was up 3.2 per cent.

Current real estate headlines do seem to be more positive. Recent headlines like The Wall Street Journal’s, ‘Housing Passes a Milestone,’ and The Washington Post’s ‘A look at US housing reports that point to a slow and steady recovery.’ Good news for the US usually means good news for Canadians, so hopefully we’re seeing the light at the end of a very long tunnel.

Do you think the US housing market is on the road to recovery? If you're Canadian, do you care?

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