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National News: Housing in 2020

National News: Housing in 2020

August 18, 2018

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.