- Economists’ Take on the 2015 Housing Market
- June 15, 2015 | Author: Michael R. Bosse
- Law Firm: Bernstein Shur - Portland Office
- In late April, I had the pleasure of attending the Annual Meeting for the Northeastern Lumber Manufacturers Association (“NELMA”) in Boston with my colleague George Burns. In addition to seeing a number of great clients (of which NELMA is one), attending some business meetings, and getting to see Bob Marley, on Friday, we heard from an economist about the 2015 economy, with a focus on housing. I was left with some interesting takeaways. Home sales were slow earlier in the year, in part due to the horrible winter conditions, but the housing market is also generally slowing down from the quick recovery it was having and is settling into what some are calling the “new normal.”
That new normal has several components. First, we all know that mortgage rates are going to start to rise, as they can’t stay as low as they have been forever. Second, the millennial generation is about to overtake the gen X’ers as the largest group of homebuyers. They also are fueling the multi-family construction boom because many of them are renting instead of buying, with some of them doing so to save up for the down payment for the home purchase. Still, the number of new single family housing starts is dreadful compared to what it was prior to the recession. Third, the economy is getting better, albeit slowly, and that means more people have jobs who perhaps couldn’t buy a home earlier but now can, or will be able to, soon. Next, add in that lending standards are starting to relax, which means that across the board, the residential housing numbers should improve. Finally, the wildcard is stuff that might happen internationally that we don’t have control over, which could impact the growth of the country’s housing market.
While this information might not result in people lining up to build new subdivisions, it is good to see that the market is improving and headed in the right direction.