The Housing Market Lives! Finally. Maybe

Dan Kowalyshyn figures he owes about $200,000 more on his mortgage than what his home in Eastvale, Calif., is worth today. The tile-roofed four-bedroom is across the street from a cul-de-sac where three of the six homes have been lost to foreclosure since his $570,000 purchase in 2006. Kowalyshyn, a software developer, has decided to keep up on his mortgage payments because he sees signs of improvement outside his window. Trucks drive by to deliver lumber for houses being put up by PulteGroup, KB Home, and Meritage Homes. “Either those builders are insane, or they’re getting some traction selling new homes,” Kowalyshyn, 40, says. “I think we’re seeing the beginning of a recovery.”

After several false starts, housing is flashing the strongest signals yet of a sustainable rebound. Buyers are wading back into the market, spurred by rising employment and record-low mortgage rates. Six years into the biggest real estate collapse since the Great Depression, housing may become a net contributor to the U.S. economy for the first time since 2005. “There are definitely green shoots in the housing market, no argument about that,” says Peter de Bruin, an economist at ABN Amro Group Economics in Amsterdam. He, along with his colleague Maritza Cabezas, is the most accurate forecaster of new-home sales in the two years ended Feb. 1, according to data compiled by Bloomberg. “Housing will contribute modestly to recovery this year, and we will see a sustained recovery in 2013” that probably will continue through 2015, he says.