Construction Costs Grow, Mortgage Rates Slow
- Rates have increased in the last 6 months, but not significant according to historical trends
- Under supplied inventory is creating homes overvalued
- Lack of new inventory in part, is a result of trade increases (tariffs on lumber, aluminum and steel imports) - directly impacting construction efforts.
- Increase of construction costs could be $2,000 per house.
- National market is becoming top-heavy
- Remodeling/renovations have increased
- Increase in purchasing existing homes
- Bubble? Prediction of slower economic growth because of tighter lending practices, market environment is not dire
By 2020 - 2021:
- Mortgage interest rates will top out at 5.8%
- The cycle of under-supplied inventory to plateau
- Housing starts will increase 5% before its plateau
Current economy is healthy:
- 2.4 million new jobs in the past 12 months
- Increased demand for housing/pushing the unemployment rate down.