Building permits are at their highest level that we have seen in over 12 years. This is very big news because even though the mortgage rates are still low, this points to strength in the housing market. There has been an increase in home completion and also, and increase in the stock of homes under construction. This is thanks to the feds monetary policy stances, we have seen as decrease in the mortgage rate. This is so important because the housing industry is one that relies heavily on interest rates. Residential investment has rebounded for six straight quarters which is the longest stretch since the recession. Do you think that this trend will continue along the path that it is going down?
https://www.cnbc.com/2019/11/19/us-housing-starts-total-1point314m-in-october-vs-1point320m-expected.html
I think that economists have a better grasp on how to rebound the housing market than they did during the last recession. As the housing market stays very high, it will no doubt correct itself eventually, but I doubt it will be to the same extent as it did in 2008.
ReplyDeleteThe housing market where I live is booming! people are selling their houses and moving into new buildings and downsizing to condos. I think people are starting to see that houses are already expensive and that the upkeep for the property is also pricey, so there is an increased demand for new buildings. I think as long as people are demanding for new buildings to be built then the housing market will be just fine.
ReplyDeleteAs stated above the housing market is dependent on interest rates heavily. Seeing that interest rates right now are low it makes sense that the housing market has seen improvement over the last few years. I would imagine that this will slow down in the coming future assuming interest rates increase and the economy doesn't continue its record growth being seen over this same time period.
ReplyDeleteAs Max said, the housing market is dependence on interest rates, so it comes to no surprise that the housing market in booming due to incredibly low interest rates. As we have learned in this class, the economy will eventually "fix" itself as time goes on. I believe that in the short run, the housing market will continue to grow. Eventually, as more time passes, interest rates will begin to rise and we will see a steady decrease in growth in the housing market.
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