Residential Housing

July 2018

We are recognizing that the problem for housing today is coming from the supply side. Throughout our discussions with builders over the past 12 months, they unanimously indicate that business is almost too good – they can’t keep up. Unlike the housing collapse in 2008-2010, where demand-side issues were fueled by the sub-prime mortgage fiasco, this time, pressures are mounting on developers & builders, struggling to meet the needs of their markets. Potential for housing is still high, but regulations, pricing, land, labor and other demographics and employment influences are hampering potential for new construction. As these countervailing forces have intensified, we are seeing housing growth slowing. Growth is projected to continue, but what we see as the potential rate is being lowered in our forecasts.

Interested in learning more about what we are seeing and our forecasts, then click here to talk to us today.

Implication

Prices go up – Demand goes down.  Monthly sales have been fairly volatile on a SAAR basis and clearly, they will continue to be influenced downward by accelerating prices.

Implication

After hovering at 3% for the past several years, in the past year ARM’s have gone up nearly 100 basis points and are forecasted to continue to rise into 2019.

Implication

Back up over 4.5% after a prolonged period of averaging around 4.0%.  Increased rates combined with higher new and existing home prices are making an impact on affordability.

2018-08-29T19:47:47+00:00