Unemployment is 5.5%.
Millennial underemployment is around 40%.
The Federal Reserve Bank of Cleveland puts the chances of a 2016 recession at just 6%.
US oil and gas has lost 70,000 jobs since Oct 2014.
Today’s economy has an identity crisis. It doesn’t know if it’s a bull or a bear. Housing is following suit, with positives and negatives locked in a tight bout, though the positives seem to be winning.
Home sales at the end of 2015 were between 5.4 and 5.5 million. These aren’t close to the foreboding numbers seen from 2004-2007, and instead reflect the pre-bubble years. “We’re not seeing the flow of new delinquencies,” says Jane Fraser, CEO of US Consumer Banking. If we’ve learned anything over the last 10 years, it’s what a bubble looks like, and we’re not in one. This is one reason why the Federal Reserve Bank of Cleveland has the probability of recession at 6%.
Even the bad comes with promise. For example, as Millennials procrastinate on home ownership (setting up years of future growth), housing has stayed strong.
The Federal Reserve reports that home equity in the U.S. has doubled to $12.1 trillion since the housing price low in 2011.
Yet according to Moody’s Analytics, every $1 increase in home equity in the fourth quarter of 2014 resulted in two cents of extra consumer spending over the next year-and-a-half – one third what it was before the housing crisis. Consumers may not know which direction the economy is going, but numbers show that they don’t feel good about it, and who can blame them? A trip around the world reveals a volatile global economy with countless tentacles, some which could reign blows on the US economy in the minds of the public. But what are these threats, and are they really a threat to housing?