Housing Decline – Will it Continue?

In March 2019, housing starts fell 0.3%, driven by a downturn in single family starts. Single family starts are weak in the Midwest and West primarily. This is being steered by an affordability issue that continues to be a concern despite signs of stabilization in the marketplace. Due to excessive regulations, lack of available lots, and continuing labor shortages, these factors are also directing the market. However, there is a bright spot with the decline in mortgage rates as they try to help keep the market afloat despite these major roadblocks builders are facing (NAHB).

In late March, The Federal Reserve made the surprise announcement that, most likely, there will be no more rate increases in 2019. This was partially due to the weakness in the housing market, and since the housing market is a good indicator of economic growth, the goal is to encourage more to take the leap into homeownership which would in turn increase the strength of the economy (Marketwatch).

It is still too early in the year to determine the future of the housing market, so caution is the name of the game as we all continue to watch closely and optimistically for a positive end result.

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