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When many analysts read bold-faced media headlines about the fastest rate of housing price increases in seven years — with some communities posting double-digit increases — they are claiming that housing’s happy days are here again.

Although statistics quoted in the media are valid, they represent factors not previously related to growth in the housing market. Shrinking inventories, record-low mortgage rates and buying interest are all carry-overs from the days prior to the start of the Great Recession in mid-2008.

But these are not the main reasons why today’s housing demand and pricing rebound appear to replicate the surge in home buying from the early 1990s to mid-2007. A more realistic outlook is the percentage of today’s population owning a home slides back at least 25 years, as does pricing, which reflects 1.9 times average income, a low last seen in the late 1980s.

In addition to the diversity of pricing in various regions of the country, especially the metropolitan areas such as New York, Washington, Atlanta, San Francisco, Los Angeles, Miami and Phoenix, it’s readily apparent that even hefty double-digit increases from the 2009 low still leave multifamily and single-family buildings with average pricing well into deep discounts from the peaks achieved right after the turn of the millennium.

A number of highly reputable surveys indicate the following statistics provide a more realistic panorama as to both the cause of today’s housing market trends and the extent toward which pricing is headed:

1. Buying for investment purposes of all types of residences has become a major factor in the current and likely future rationale for house purchases. With prices still traditionally low, this buying interest has attracted not only cash-rich domestic investors, but also individuals worldwide with an interest in U.S. fixed assets of all types.

2. The penchant of Americans to purchase their own home stretches back to post-World War II days but is only slightly better today than it was during the 2008-10 recession. As I’ve written previously, many Americans have rejected owning a home in favor of medium-term leasing or short-term renting. This trend is tied into today’s need for mobility, which allows for quick moves to available jobs in other parts of the county.

Also contributing to the reticence of owning a home is the hefty mortgage hanging over the consumer’s head and the fear of getting stuck with a new “under water” ownership. Consequently, the heady days of “flipping” houses for a profit are no longer an incentive. No longer is homeownership considered a reliable asset.

3. This is not to say that the huge housing market, and the massive construction that it entails, has not improved. But the routine 1.6 million annualized housing starts or building permits of residential construction’s salad days are a happy remembrance, not a realistic expectation of a major economic comeback to a level that housing once represented.

First-half economy lacks drive

The best that can be said of the world’s only superpower’s first-half economic performance this year is that “it could have been worse.” After surviving the over-hyped fiscal cliff at the turn of the year, anticipating the March 31 sequestration and avoiding confrontation with an unrestrained record debt, the 2%-plus annual average of the post-recession years (2009-12) seems to have become the norm, with no breakout in sight.

Potentially, the U.S. economy’s growth should be rivaling that of China, which has slowed to a 7.5% growth factor, after years of double-digit increases. With the world’s leading reserves of fossil fuels (oil, natural gas and coal), the undisputed drive of its independent business sector and acknowledged as the world’s superior technological innovator, the United States should be off to the races.

Unfortunately, the increased governmental restraints and misdirection into nonproductive sectors have become the major burden to the most proficient economic opportunity any major world power has ever been able to anticipate. One only has to point to the misspent 2009 trillion-dollar stimulus that could have been focused on an FDR/New Deal-like development of infrastructural pipelines, bridges, dams, roads and railroads that have been left to deteriorate.

The most illustrious performance of the three post-recession years has been the unexpected viability of energy development. With hydraulic fracturing taking the lead, this emerging technology has opened up the long-anticipated concept of energy independence and the opportunity of America becoming a leading world factor in the export of liquid natural gas, oil derivatives and products generated from these natural resources.

But, here again, the U.S. government has put up barriers, utilizing the Environmental Protection Agency to use the regulatory process for debilitating restraint. The most dramatic example of this federal antipathy has been the delay in approving the Trans-Canada XL oil pipeline, which would facilitate millions of barrels of oil per day flowing directly into U.S. refineries in southern Louisiana and the Houston area.

With an anticipated $20 trillion U.S. Treasury debt by 2020, the acceleration of America’s newly discovered energy resources could prove the one overriding offset to potential federal bankruptcy. But without a reversal of the administration’s policies that have proven the antithesis to the expansion of business opportunities, we can hope for little more than 2% growth in the years to come.

First budget surplus in five years

It wasn’t exactly a record-busting bonanza, but the federal government was able to show a sliver of black ink in April, a feat that had not been accomplished since before the global financial breakdown.

What is most remarkable about this feat is that it has come forth without any major official agreement this year between Congress and the White House, other than higher taxes on the upper 2% of taxpayers, a modified implementation of sequestration and cutbacks in various agencies by administrative fiat rather than by presidential executive orders or congressional action.

This one-time ray of light bursting through an otherwise dark cloud bank of deficits should not generate a trend under present circumstances. What it does indicate is that the cumulative 2013 fiscal deficit will likely fall short of the $1 trillion annual deficit that had posted a four-year streak under the Obama administration.

It also is likely that even if the April anomaly is not replicated, it is probably a given that the total of the fiscal year ending on Sept. 30 will come in between $9.5 hundred billion and $9.9 hundred billion. The Congressional Budget Office recently indicated a possible deficit decline as low as $650 billion for fiscal 2013.

As statistics begin to be publicized in the weeks ahead, it will become noticeable that two major factors have benefitted the deficit reduction equation.

1. Higher tax rates and additional tax revenues stemming from the booming energy sector combined to exceed expectations as fiscal 2013 enters the final quarter.

2. Even a limited attempt at sequestration in the military as well as civilian agencies, plus a more aggressive cutback in discretionary spending, are beginning to make their mark. The ending of the two-year 2% payroll Social Security withholding cutback has helped to improve the deficit, by restoring it to 6.2%.

These relatively minor improvements have hardly begun to solve the problems of overwhelming entitlements and profligate expenditures. However, I doubt that serious compromises on entitlement reformation or a rational new federal tax approach is in the offing before next year’s mid-term elections. The economic or fiscal circumstances at that time will have a larger say as to which way the wind will blow in President Obama’s last two years.

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