4 Key Factors On Our Housing Market Today
Hello all! I wanted to write about some of the discussion I’ve had with so many folks; concerning today’s housing market and what’s to come with home prices.
There’s a great deal going on in the economic world, and much of it is affecting our housing market directly. Some of it is going to be positive, some of it is going to be negative… most of it, we just don’t know yet.
There are four key factors on our housing market today, and understanding them is vital to making your short-term and long-term goals in our real estate market.
1. Economic Slowdown
2019 began with many leading economists thinking we could likely see a recession late in the year or early 2020. But then as spring arrived, it was reported that economists had began to project this recession past 2020. Currently, there are 3 leading surveys that theorize a recession may begin in the next eighteen months.
2. Interest Rates
How much is it going to cost you to borrow money? I posted an article not long ago, “Are Low Interest Rates Here To Stay?”. It explained that our most recent information from Freddie Mac makes it look like they are… and interest rates are currently the lowest they’ve been in 21 months.
3. Building Materials
With all of the buzz about tariffs, this could greatly impact the housing market. In a recent article, the National Association of Home Builders reported that our homebuilding industry uses as much as $10 billion in imported Chinese goods. With the U.S. and several other powerful nations involved in these tariff and trade negotiations, we could see a 25% spike in the cost of building materials.
Immigration is a very hot topic in our political climate today, and this isn’t made any easier by its direct effect on our economy, our homebuilding industry… and subsequently our housing market. Fewer undocumented workers in our labor force make the cost of construction trades increase, thereby making it pricier to the end buyer of that newly-built home. John McManus wrote a great article in homebuilderonline.com, “Immigration reform–particularly in some markets like Texas, Arizona, California, and maybe Denver–is a material issue to consider in the labor capacity constraint equation.”
We are in a robust housing market. Wages are going up, home values are appreciating, and interest rates on mortgages are at a 21-month low. It doesn’t matter whether you’re thinking of buying a house, or selling your current house… now is a phenomenal time to be in the real estate market!I hope you’re all doing well; should you ever have any questions as it relates to your real estate needs or just general questions about the housing market… I’d love to grab a coffee with you and discuss it!