I’m Mary Walden with economist MW welcoming you to the economic perspective. Today’s program asks if there is optimism for the housing market. Mike, although the housing market is certainly better than during the troubled period of the Great Recession, it has certainly not been robust. For example, new construction is on pace to decline this year. Are there reasons the housing market might do better in the future?
- Yes, three reasons
- Interest rates are dropping, compliments of the Fed
- Two, the number of households are increasing – this is key because household formation drives the demand for housing
- Three – the Millennial generation is approaching middle age – have reduced college debt, salaries are rising, and have partnering or marrying and having children – all good things for housing demand
- Main constraint – particularly in cities – cost of available land
- I’m MW
And I’m Mary Walden for the Economic Perspective, an NC State Extension program from the Department of Agricultural and Resource Economics.