External Affairs Alert – Housing

CRE Members: Are Risks and Opportunities in Housing among the issues or trends we should consider for the 2017-2018 CRE Top Ten Issues Affecting Real Estate?

We Need Your Feedback! Is it something you feel is important to the industry? What do you see as the implications?

Drawn from a brief recently published by Calculated Risk:

The housing market is facing positive and negative forces. A warmer-than-normal winter lifted housing activity in early 2017. It isn’t yet clear if that stronger early activity will lead to somewhat slower activity in the normally “peak” spring months for home sales.

On the plus side, and potentially boosting housing activity, consumer confidence has risen with general improvement in the economy, stock markets, and the employment situation.

Home builders are feeling much more confident, with the NAHB home builder confidence index reaching a new cyclical high of 71 in March. But, while builders are optimistic, rising interest rates will likely dampen affordability.

On the policy side, financial market deregulation will likely impact the flow of credit. Additionally, there is some renewed focus on reforming the mortgage finance system and bringing Fannie Mae and Freddie Mac out of conservatorship. Immigration reform could impact the housing market over the medium term.

Calculated Risk also notes that, if the Fed starts to reduce its balance sheet later this year, it could nudge longer rates higher (and mortgage rates “a little more” as well). They note that there is the potential for reduced foreign buying due to the strong dollar, U.S. political concerns, and capital controls in China.

What do YOU Think?

Members, please reply to info@cre.org to let us know your thoughts.