The Fed may raise interest rates soon, however, the real estate market is so strong that professionals in the market remain confident.
The real estate market recently has been exploding, and the only downfall that was causing a spike in prices was that construction could not keep up. However, it is beginning to pick up steam. Recently released Commerce Department numbers confirm that the rebound in U.S. home construction increased greatly last month as builders broke ground on more projects than at any time since 2007. There are more new construction projects going on in the US than there have been in the last eight years. This definitely signifies that construction is catching up, supply will increase, and meet demand at a happy place.
“Housing is in a real sweet spot, moving higher but not dangerously so,” says Eric Green, head of U.S. economic research at TD Securities. “The housing market will be strengthening over the second half (of 2015). The Fed raising rates will not change that.
Residential starts increased 0.2 percent to a 1.21 million annualized rate, the most since October 2007 – a gain that was led by single-family houses.
An improving job market and growth in households make a stable foundation for this recovery from the Great Recession, says Green as well. Housing permits decreased in July.
These increases in construction are exactly what the real estate market needed to balance out. While low interest rates also encouraged many buyers to enter the market, the Fed potentially raising rates is not something to worry about. Economic recovery and a thriving nation will keep the real estate market strong and healthy for months to come.
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