August 23, 2012 10:03:30 AM
WASHINGTON -- The recovery of the U.S. housing market is looking steadier and more sustainable, a trend that will likely add to economic growth in 2012 for the first time in seven years.
Purchases, construction and prices are gradually but consistently increasing, though they remain far below levels seen in a healthy economy.
Sales of previously occupied homes rose 2.3 percent in July from June to a seasonally adjusted annual rate of 4.47 million, the National Association of Realtors said Wednesday. Over the past 12 months, sales have jumped more than 10 percent.
New-home sales have been strengthening, too. Toll Brothers, a builder of high-end homes, said Wednesday that it's enjoying its most sustained demand in more than five years.
The "evidence that the housing market is recovering ... is fairly clear across a wide range of reports," said John Ryding, an economist at RDQ Economics, a forecasting firm. Housing "is now becoming a small positive for the economic outlook."
That's a big change for an industry that has been a major drag on the economy since the housing bubble burst more than five years ago.
Michelle Meyer, an economist at Bank of America Merrill Lynch, forecasts that home construction will add 0.2 percentage points to growth this year.
Other recent reports add to the picture of an improving housing market, though one that's recovering at a painfully slow and uneven pace.
Home prices are rising nationwide. They increased 2.2 percent from April to May, according to one leading index. That was the second straight increase after seven months of flat or declining prices.