Jul 30 2015
Mesirow Financial introduces Themes on the Housing Market, a new quarterly publication focused on the housing market. It will track underlying trends and what those shifts mean for the broader economy.
David Nice, a member of Chief Economist Diane Swonk’s Economic Analysis group, will write about trends important to home buyers, sellers, builders and investors. This first issue examines prospects for the single-family home market, which supports the overall economy.
“The 50 bps increase since February translates to a $71 per month increase on a 30-year conventional mortgage for $250,000. That’s not likely to be a deal breaker for most first-time buyers.”
Economist David Nice predicts that the Federal Reserve’s plan to raise short-term interest rates will not interrupt a trend to build more single-family homes for first-time buyers. “The 50 bps increase since February translates to a $71 per month increase on a 30-year conventional mortgage for $250,000. That’s not likely to be a deal breaker for most first-time buyers.” He notes that sales have actually increased since mortgage rates started rising.
The short supply of entry-level homes on the market has accelerated price appreciation, but David Nice’s forecast shows a surge in housing starts next year to 1.29 million units on an annualized basis. “Lower gas prices help by making commuting cheaper for first-time buyers and allow builders to develop less expensive, greenfield sites farther from urban centers.”
Source: http://www.mesirowfinancial.com/