There is more evidence that the American economic recovery is firmly taking hold as the American Bankers Association reported recently that credit card delinquencies in the United States are at the lowest level since 1990.  This is further proof that consumers in the United States are augmenting their personal balance sheets, which creates hope for the future.  From that increased consumer confidence, housing prices continue to rise.

James Chessen, the Chief Economist of the American Bankers Association, stated about the good economic news, "Sharply lower delinquency levels reflect improving consumer balance sheets, steady job creation, and a continuing increase in household wealth."

All of those factors, and more, have led to the revitalized housing market in the United States.  As detailed in a previous article on this site, the National Association of Home Builders recently reported that 255 housing markets in the United States were improving.  That figure is more than triple the number of American housing markets that were getting better in June 2012.

That the housing market is improving along with the personal wealth of the American consumer is to be expected.  Due to The Great Recession, there was a tremendous of amount of demand built up for housing.  Due to the adverse economic conditions and bleak outlook for the future, many chose not to commit to the long term obligations of owning real estate.

But, as the chart below shows, the exchange traded fund for home builders (NYSE: XHB) has soared along with Standard & Poor's 500 Index (NYE: SPY), a broader measure of the overall strength stock market than the Dow Jones Industrial Average.  With more Americans feeling better off financially, as manifested by the bull market in stocks, more are buying homes.  As a result, home builder companies, represented by the XHB as the exchange traded fund for the industry, are surging in share price.



The report of lower credit card delinquencies provides more proof that economic conditions should continue to improve in the United States.  With more household wealth, consumers will invest more.  More of that is flowing toward the housing market, as the percentage of Americans being owns stocks in some form is at its lowest in years.

This better economic news was important for another reason noted by Chessen, as "Household net worth rebounded in the first quarter, rising above its pre-recession peak for the first time in over five years.  Rising stock and home prices create create a wealth effect that boosts consumer confidence, which contributes to healthier finances and a greater ability to pay down debt.'