President Barack Obama is getting a boost from a damaged part of the U.S. economy that his policies have done little to repair.
A long-awaited housing recovery is helping lift consumer sentiment to its highest levels since the start of the financial crisis, just in time for the Nov. 6 election. Home prices are rising, sales of new homes are at a more than two-year high and housing starts are running at their fastest pace since 2008.
After five years of shrinkage, Americansâ€™ real estate holdings have risen in value for two consecutive quarters and are worth $730 billion more than at the end of 2011, Federal Reserve data show. More than 1.3 million homeowners who were â€œunderwaterâ€ on their mortgages — the owners owe more than their property is worth — have moved above the break-even point on their homes, according to CoreLogic of Santa Ana, California.
â€œPeople are beginning to buy into the idea that a real recovery in housing is under way; that has to affect confidence,â€ said Jim Oâ€™Sullivan, chief U.S. economist for High-Frequency Economics in Valhalla, New York. â€œThe housing meltdown was so central to the crisis, even a modest recovery brings with it pretty powerful symbolism.â€
Nationally, home prices have rebounded from their post- crash lows. The S&P/Case-Shiller 20-city index released this week rose 2 percent in August from a year earlier. A broader index by CoreLogic, a real estate information service, showed prices up 4.6 percent in August compared with a year earlier.
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