June 3, 2017

Update: Economic Outlook

Economic Outlook

Looking forward, there are signs that conditions in the housing market should show continued improvement in the coming months:

·        While the economic recovery has been uneven, it continues to add jobs, a key driver for housing market recovery.
·        Low interest rates and post-bubble house prices that have settled back to normal in most of the country means that housing affordability is high in many markets.
·        Growing household formations, along with shortages of lots and labor, have resulted in tight housing inventories in many markets across the nation.

Housing Market Snapshot

Housing Starts                      (April 2017)
Total:  1.17 million
           Single: 835,000                  Multi: 337,000
Home Sales*                         (April 2017)
New: 569,000
                    Existing: 5.57 million

Median Home Prices          (April 2017)
New: $309,200
                  Existing SF: $246,100
*Seasonally Adjusted Annual Rate; Arrows indicate direction from previous month for starts and sales and year for prices.

NAHB/Wells Fargo Housing Market IndexThe index, which measures builder confidence in the market for newly built single-family homes, rose two points to 70 in May from an April reading of 68. Any number over 50 indicates that more builders view sales conditions as good than poor.

NAHB Chief Economist Robert Dietz’s analysis: 

“Builders remain optimistic about market conditions even as they deal with higher building material costs and shortages of lots and labor. The housing market is expected to continue on a gradual, upward path throughout the year, buoyed by rising household formations, continued job growth and tight existing home inventory. Moreover, the pace of wage growth and upcoming Federal Reserve monetary policy announcements will help shape future changes in mortgage interest rates.”

submitted by Michael Kurpiel, CGA, CGP

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