The housing sector is one of the most crucial parts of our economy. What happens to housing affects people who work directly in the construction business as well as other industries all across the economy.
The housing market is in much better shape than you probably realize.. And that’s a strong sign for the overall economy.
Home Sales Are Booming
According to the National Association of Home Builders (NAHB), the housing sector directly accounts for roughly 15-18% of national gross domestic product.
So if housing is rebounding, it’s a good thing for the economy. And right now, housing appears to be in great shape.
The most recent data for new-home sales was much stronger than expected. The annual sales rate was 776,000 in June 2020, significantly above the expected number 700,000.
Considering these took place in the summer, which is a traditionally slower time for the real estate market, these numbers are extraordinary and speak to the underlying strength of the U.S. economy. They are also a sign that the Federal Reserve’s stimulus efforts are working.
Builders Are Confident
Another indicator that housing is rebounding is that fact that home builders have tied their 32-year record for confidence in the market as measured by the NAHB Housing Market Index (HMI).
The Index, which has been conducted by NAHB for 35 years, jumped by 6 points in August to 78. Not only is this a return to normal, it is also 6 points higher than it was in March before COVID-19 shut down construction sites and quarantined potential buyers. The last time the HMI was this high was in December 1988.
NAHB chief economist Robert Dietz said this reading is a sign that housing continues to lead the economy forward.
“The demand for new single-family homes continues to be strong, and low interest rates and a focus on the importance of housing has stoked buyer traffic to all-time highs as measured on the HMI. Single-family construction is also benefiting from a noticeable shift in housing demand to suburbs, exurbs and rural markets as renters and buyers seek out more affordable, lower density markets.”
Conclusion
Housing is clearly shows signs of momentum as sentiment from all parts of the industry surges back to pre-COVID levels. As things continue to improve, competition is only going to get more fierce.
If you would like to purchase a home, the time to act is now! Fill out the form below to request a consultation with one of our experienced mortgage advisors. We will help you analyze your goals and finances and put a plan in place so you can be confident in taking advantage of today’s real estate market and become a homeowner.
We look forward to hearing from you!
