Housing starts were up sharply in October, a sign that builders are responding to strong demand and undersupply of homes across the country. The housing market is likely to continue strengthening in 2017 — with job and wage growth and consumer confidence improving. Rent-increases are also on a tear in many markets, driving people to buy if they can. On the other hand, long-term interest rates (on Treasury bills and mortgages) have risen lately — because of Janet Yellen’s signals that the Fed is closer to a decision to hike short-term rates in December, and because of rising expectations for economic growth and stock-market strength in 2017. Higher mortgage rates might have a dampening effect on home prices and home sales in the long run, as they add to the cost of a home purchase. But in the short-term, buyers are likely to ignore or adjust to marginally higher mortgage rates, and to be driven in their purchase decision by other economic factors — such as the strong job market, higher wages, and rising rents.
We’re here to help you navigate this changed world and economy.
Our mission at Marketplace is to raise the economic intelligence of the country. It’s a tough task, but it’s never been more important.
In the past year, we’ve seen record unemployment, stimulus bills, and reddit users influencing the stock market. Marketplace helps you understand it all, will fact-based, approachable, and unbiased reporting.
Generous support from listeners and readers is what powers our nonprofit news—and your donation today will help provide this essential service. For just $5/month, you can sustain independent journalism that keeps you and thousands of others informed.