Housing Market Trends and Construction Forecasts
Home building can be changed due to external economic factors. These can directly effect and shape its success. Inflation, unemployment numbers, interest rates, social or political changes alter the homebuilding business. These external factors keep homebuilders cautious about their business prospects.
Hope for 2017 Homebuilding Industry
A few reliable signs suggest a strong year for home building.
First, inventory is limited in several markets. Second, home demand has risen. Third, new home construction has been steady. To meet that demand, homebuilders are preparing to increase their production rate. Across the country’s one-hundred major metropolitan areas, “…homes available for sale is currently down an average of 11% year over…” Homes in those areas are getting snatched up 14% faster. The housing supply cannot handle this hungry market.
Rent to Own
Investing is a motivating factor for first-time homebuyers. Jonathan Smoke, Chief Economist with Realtor.com, has publicly stated, “…people are focused on getting into homeownership because renting…over the long term, is something that can really impact a household’s financial situation.” Americans are responding wisely to what Realtor.com describes as “…a damper on price appreciation…” This is a response which could see large parts of the housing market bought by first-time buyers. If that ends up playing out, the demand for new housing units may increase.
Credit rating agency Moody’s has a telling prediction. Their experts say, “…revenues in the homebuilding industry to rise at an annual rate of more than 10% for the next 12 to 18 months.” Also is this related forecast, “Operating income in the building materials sector is also expected to grow by more than 7% during [the next 12 to 18 months].”
Many connected factors suggest growth within the home building industry. Less houses being available and buyer optimism set the stage for a more home construction. The end result could be beneficial for those looking to enter the housing market.
Contact an On Q Financial, Inc. mortgage consultant for insights and advice regarding this fast changing market.