The housing market has continued to grow according to a New York Times article with recent data showing growth in the beginning of 2016. Specifically the home price index rose 5.7 percent from a year earlier. The article also notes that the rise in the home price index is related to increased employment and income of Americans which has increased demand for homes, most notable in metro areas. While buyers are demanding more homes, sellers are more reluctant because it is harder to find a better home at a cheaper price. Along with a relatively low supply of homes for sell this has made homes available for sell low. The article is optimistic that because of increasing economic growth overall in the U.S, Americans will become more confident in the market and more homes will become on sale.
http://www.nytimes.com/2016/03/30/business/economy/home-price-index-continued-steady-climb-in-january.html?rref=collection%2Ftimestopic%2FUnited%20States%20Economy&action=click&contentCollection=timestopics®ion=stream&module=stream_unit&version=latest&contentPlacement=2&pgtype=collection
I hope that economic growth will allow the housing market to reach equilibrium. As we all know, it was the housing market that was a catalyst for the Great Recession. Luckily, this time around people are having trouble actually finding a house. Whereas last time people were buying mansions left and right. I expect this period of high prices will eventually fall.
ReplyDeleteI agree with Sam in that I also believe that this period of increasing prices will eventually fall, but nothing like we saw in the housing bubble during the Great Recession. This is something that I think should be watched carefully to see if it keeps rising at this rate even if we are in a good economic condition currently.
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ReplyDeletealso agree with Sam. The housing market will eventually fall, but we are in a different situation than last time, so the impact on the economy will most likely be different.
ReplyDeleteI agree with the comments about how there will eventually be a fall. Maybe this increase is in response to expectations. People are wanting to purchase homes now before the rates will go up.
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