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Economic growth main key for housing market rebound

The Wall Street Journal believes job growth can aid the housing recovery.

The Wall Street Journal believes job growth can aid the housing recovery.

The Wall Street Journal believes the key to fixing the housing crisis is getting job growth moving forward along with the government more strictly regulating creditors.

Despite home prices stabilizing in the first six months of 2010, the newspaper states home sales have only rebounded marginally but should increase soon, given that home prices are the lowest they've been in 10 years.

Thomas Lawler, a housing economist, told the paper slow home sales could continue because "the overall economy does not grow sufficiently to produce any meaningful rebound in jobs."

According to the newspaper, a main reason mortgage companies are hesitant to give credit to potential homeowners is that most current homeowners owe more than their home is worth and are easily at risk of defaulting if their jobs are lost.

The FHFA reported in December the average interest on mortgage contracts at the end of November was 4.42 percent, a decrease of 0.07 percent from October. Also, the average loan amount in November was $214,800, a decline from $215,000 in October.