The Housing Market Predicts A Slow Down In The Economy
The housing market can be dictated on the current state of the economy. What we mean by this is that it can all depend on if this is currently a buyer’s or seller’s market. At often times, the housing market effects the state of the economy. This is why analysts from the economy study closely the housing market. Dictating this can also predict and help others prepare for a recession if need be.
Now, one critical clue from the housing market has emerged to suggest economic growth is likely to decline in single-family households.
What we are really trying to say is that construction activity appears to be slowing.
Existing housing maintenance and remodeling work is also down, continuing on a sufficient decline. Maintenance work is also down 5.53% this year, while remodeling work was down 10.07%.
Interestingly enough, some cities are defying national trends, posting increases in new construction and maintenance in February.
Those cities are; Dallas, New York City, Chicago and Washington, D.C., saw activity in new construction and maintenance rise.
Experts say Chicago saw the greatest increases, with new construction up 60.15% and maintenance up 19.51%, which the report said could be a result of the city’s strategic 5-year housing plan to solve affordability problems.
BuildFax CEO Holly Tachovsky said that the performance of these indicators over the next several months will be key to determining the overall impact on the economy.
“There have been persistent declines across key housing indicators for four consecutive months. However, we anticipate some economic relief as we head into 2019’s spring home buying season,” Tachovsky said.
“Mortgage rates have reached recent lows leading to increased potential for home sales, which is oftentimes followed by a surge in remodeling activity,” she continued. “The performance of single-family housing authorizations, maintenance and remodeling activity through this next season will shed light on whether declines in the housing market will spread to the broader economy.”