Housing helps keep recovery going

Mitchell Hartman Feb 17, 2016
HTML EMBED:
COPY

Housing helps keep recovery going

Mitchell Hartman Feb 17, 2016
HTML EMBED:
COPY

Housing starts and permits for January 2016 will be reported by the Commerce Department on Wednesday.

With all the weakness and uncertainty that have emerged in the U.S. economy in recent months — in manufacturing, exports, energy and financial markets — the residential construction sector has grown steadily and not faltered. In 2015, building permits were up 12 percent and housing starts were up 6.4 percent.

Christopher Mayer at the Columbia University Business School said it has gotten easier for people with steady jobs and income to qualify for mortgages. That is helping young first-time homebuyers and anyone who lost their home and has now repaired their credit.

“Credit is modestly loosening,” Mayer said. “And before people panic,” he added, “we’re not talking about 2007 standards,” referring to the overly loose mortgage-lending standards that helped precipitate the housing bubble and subsequent financial crisis.

Economist Robert Dietz at the National Association of Home Builders predicts a 15 percent rise in single-family home construction in 2016, a pace that he expects will overtake multifamily apartment construction, which had been the leading sector coming out of the recession.

Dietz said builders around the country remain generally optimistic, even as they begin to face production constraints caused in part by the pickup in market demand for new home construction.

“There are a number of supply-side headwinds,” Dietz said, “what we’ve been calling ‘the three Ls’: lots, labor and lending.’ “

As a nonprofit news organization, our future depends on listeners like you who believe in the power of public service journalism.

Your investment in Marketplace helps us remain paywall-free and ensures everyone has access to trustworthy, unbiased news and information, regardless of their ability to pay.

Donate today — in any amount — to become a Marketplace Investor. Now more than ever, your commitment makes a difference.