An astounding read on housing

A report from Wells Fargo reveals a booming mortgage business — and, a U.S. economy in fine shape… so says Cramer on MSN Money

Cramer says, “Put simply, Wells Fargo is telling you that housing is back and that it is booming and that this moribund part of the economy is now a huge tailwind, not a headwind. Can housing carry the economy? No. Can it offset sluggish employment? I’m beginning to think it can.”

Numbers released in early July from Wells Fargo, which has more than 30% of the mortgage market in this country, are according to Cramer: ”… astounding numbers. They’re the kinds of numbers that signal a gathering strength in housing, something that few people expected and fewer still had thought possible, given that the economy was supposed to have hit a wall a few months ago.

When the largest bank for mortgages reports these numbers, you simply have to rule out the kind of slowdown the employment numbers suggest to us. You have to conclude otherwise. The numbers from Wells are just too big.”

And, from another source, Core Logic, the same news

The reduced inventory of unsold homes is key, says Mark Fleming, chief economist at CoreLogic, a real estate data gathering firm. For the past couple of years, house prices have risen in the spring and then slumped; the declining supply of houses for sale is reason to believe that won’t happen again this year, he says.

Builders began work on 26% more single-family homes in May 2012 than May 2011. The stock of unsold newly built homes is back to 2005 levels. In each of the past four quarters, housing construction has added to economic growth. In the first quarter, it accounted for 0.4 percentage points of the meager 1.9% growth rate. “Even with the overall economy slowing,” Wells Fargo Securities economists said, cautiously, in a note to clients, “the budding recovery in the housing market appears to be gradually gaining momentum.“

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