Local real estate propelling housing market

May 20th, 2013

Investments in residential housing are on the rise.

Residential investments are making gains, driving the housing market forward into recovery. In the second half of 2012, residential investment grew 14 percent, according to the MarketPulse report from CoreLogic. In the same time frame during 2011, these investments improved by 3 percent.

This kind of activity shows positive signs of overall growth in the real estate market, from buying to selling to building. Investments have increased in home construction, prompting growth across the entirety of the U.S. economy. Historically, economic activity in residential building has comprised approximately 5 percent of overall GDP. While not quite at this level, the importance of the housing market’s contribution to the economy is steadily increasing, contributing to the 2.5 percent growth in GDP during the first quarter of 2013.

Perhaps most importantly, as foreclosure rates drop, there are fewer homes available, creating a more competitive housing market. Demand for homes is up, which is good news for those looking to relocate or sell their homes to upgrade to a second or third home. New sales are particularly increasing in suburbs close to metropolitan areas, many of which were significantly hurt during the housing crash.