General
Housing is the economy’s Energizer bunny: It keeps going and going
Even as some sectors of the economy remain muted, the housing boom keeps going and going. That’s obviously good for builders, but it could also be great news for the broader economy and stock market — especially since this strength appears to be nationwide.
The New York Fed noted that “housing markets have been steady to slightly stronger, on balance, in recent weeks” and that “sales activity picked up noticeably across New York City, far exceeding prepandemic levels.
In Atlanta, the Fed said “demand for housing was robust, inventories declined, and home prices rose” while the Chicago Fed said “residential mortgage activity continued to be strong” and that there were “all-time low delinquency rates” in the housing market.
“The impact of…higher rates shouldn’t be a source of major concern for the housing market,” Barnum said, in response to a question from CNN Business.
Other business leaders also are dismissing worries that home sales may soon peak.
“I don’t see any real negatives in the future. No storm clouds on the horizon, I would say, from our viewpoint,” Sheahan added.
Some executives noted the housing market is still playing catch up after years of more sluggish activity. Demographics are helping, too, as older millennials look to ditch the stereotype about living in their parents’ basement and start families of their own.
Bitzer also noted that “interest rates remain at historically low levels” and “the housing market…will be a strength.”
Meanwhile many Americans, particularly those working in more white-collar services types of jobs, are still working from home. Some may never return to the office. That means more people are likely to shun smaller apartments for larger houses with ample home-office space.
