Housing market recovery buoys Wall St.
(CBS News) The housing meltdown led the country into the Great Recession. Now housing is leading the recovery. A new survey Tuesday finds homes were selling in March at prices nearly 11 percent higher than a year ago -- the highest, in fact, since 2006.
That news gave Wall Street a boost. After the survey came out, the Dow rose as much as 218 points. It gave about half of that back but still closed at a record high -- 15,409.
On the sales lot at Park Cities Ford in Dallas, Texas, confidence in the economy is building.
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"We see as everything as positive at this point," said managing partner Jeff Enright.
According to him, business is up 18 percent over a year ago.
"We don't want to get over excited," he said. "But we are, 'cause we see things picking up across the board."
Dallas and Fort Worth are two of the country's fastest growing cities. Construction is picking up as the housing market bounces back. And that's lifting auto sales for Enright's dealership and others.
"They need what? They need trucks. And that's what they're buying," he said.
Nationally, all 20 major cities in the S&P Case Shiller index showed year-over-year gains in home prices, led by those hardest hit by the recession -- Phoenix and San Francisco -- up more than 22 percent, and Las Vegas up more than 20 percent.
So did people see in those numbers? "The housing market's recovering," said Michele Meyers, senior U.S. economist with Bank of America Merrill Lynch. "And as a result, consumer confidence is picking up, which then feeds back into the housing recovery."
She added: "I think both those are pretty powerful forces in terms of gauging the improving sentiment in the U.S. economy. The data shows that the economy in continuing to heal and at a faster pace than we had been expecting at Bank of America."
And that's reflected in the stock market. Here's an interesting number: the Dow was up for the 20th consecutive Tuesday. More than 2/3 of its 17.5 percent gain this year has come on Tuesdays.
As for how much of the "healing" is left for the housing market, it's got a long way to go. The housing market is now back to 2006 levels, but it didn't peak until 2008. And from that year, we're still down by about 28 percent.
