The nation’s economy is enjoying one of the longest stretches of continued GDP growth in history. But the level of economic acceleration might soon begin to ease.
In a midyear economic forecast presentation now available to NAHB members, NAHB Chief Economist Robert Dietz was quick to acknowledge that, aside from the declining affordability of housing, “overall economic conditions remain solid.”
He noted that while certain seemingly negative dynamics of the economy will actually prove to be good news for housing demand, several economic challenges will persist.
Housing affordability will become a bigger concern in the future, but has yet to negatively affect demand in the Metropolitan Phoenix Area. Sales are surging. Development and construction costs have pushed up home costs, and the lack of supply is enabling both resellers and homebuilders to raise prices at healthy paces now. The greater concern, though, is rising mortgage interest rates. They’ve pushed more buyers into purchasing homes sooner than they otherwise would have up to now, but more significant rises in late 2019 and into 2020, will potentially negatively affect demand.