Housing Is Back (Again). Or Is It?

Pronouncements that American housing is back have been wrong, or at least overly hopeful, so many times it’s easy to dismiss any optimism and remain skeptical.

Lennar’s strong quarterly report on Monday added some validity to the story that the home sector finally is, actually, recovering. It’s true that we’ve been hearing it for years, and in that time, the housing industry has been at best uneven. But trading in the shares of Lennar and a group of its competitors suggests investors are giving more credence to the rebound idea these days.

You might not like the reasons behind it. You could still think it’s an upturn that’s gotten started on a flimsy foundation. A big part of what’s bolstering the stocks is the Federal Reserve. The U.S. central bank has elevated a number of assets with its bond market interventions, and earlier this month it said it would be a big buyer of mortgages. The securitized bond-buying plan, which will be worth untold billions by the time it’s done, if it ever is, could keep rates down and make borrowing easier for home buyers.

In other words, the Fed’s insatiable demand for mortgages may be a gift to the homebuilders, driving demand for the thousands of dwellings they put up every year.

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