Housing and the Economy
Housing has always been a critical component of the American economy. However, housings success is dependent on a variety of factors that include job creation, affordability, interest rates, and consumer confidence. In November of 2017, consumer confidence hit a 17 year high. With the stock market touching 25,000, a revised tax code, and strong job growth housing will continue its slow but steady rise.
New home construction will increase and existing home sales will be strong again this year. However, both markets are constrained by lack of inventory, not by a shortage of buyers. These conditions, along with a reduced labor pool, will cause costs and prices to rise. Additionally, economists expect the new tax changes to have a positive impact on the economy and job market. However, the projected increase in interest rates should be a consideration for anyone planning the construction of a new home.
Mortgage rate increases are not expected to be dramatic, but any rise will impact mortgage payments and personal budgets. For every .5% increase in mortgage rates, your buying power goes down by 4 to 5%. According to the National Association of Home Builders, housing markets across the country are expected to maintain their currently healthy conditions. Out of 400 U.S. markets, only seven have seen any drop in new housing numbers at all.
The Grand Rapids area has seen considerable growth in recent years and has repeatedly landed on the list of top ten best markets for the last several years. With costs and prices increasing and interest rates expected to climb into 2019 now is a great time to begin construction of your new home.
If you are planning to build or would just like to discuss the possibility, please call Eastbrook Homes today to talk with our team. Eastbrook Homes would love to help you celebrate the next holiday season in your dream home!
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