Lawrence Yun, the National Association of Realtors chief economist, said, "The housing market clearly is in a recovery phase..." — a rather aggressive statement, given the tepid numbers we have seen to date.
What will really kick-start housing? Yun rightly called for a "return to more normal loan underwriting standards." In other words, the NAR is frustrated that a lot of their buyers are getting turned down by underwriting standards that have gone to the other extreme.
Not surprisingly, the big gainer on this announcement were banks. They have been the laggards in 2010, but if real estate picks up, and an improving economy increases loan demand, financials could be the market leader in 2011. (Special Report: Our Boldest Predictions for 2011)
Elsewhere: the failure of Mr. Trichet at the ECB to embark on a big expansion of the bond program hasn't killed our market this morning, or Europe's...what does that say?
It means that, for the moment...there are a lot of tailwinds:
1) the U.S. economy has put up a series of steadily improving data points for several weeks;
2) the China juggernaut continues;
3) the ECB is still buying bonds, they are just not announcing a big expansion of the program.
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