Economists predict that the recovering housing market will continue to strengthen throughout 2015, even with the upcoming rise in interest rates. This article from Brena Swanson of HousingWire highlights recent comments by First American Financial Corporation Chief Economist Mark Fleming, as well as a report from Bloomberg that highlights the housing market’s solid positioning for continued growth in the second half of the year.
The housing recovery will be able to digest the upcoming impact of the rise in interest rates, according to one housing economist.
Mark Fleming, chief economist at First American, commented on the Thursday release of the National Association of Realtors’ existing-home sales numbers saying, “An expected move by the Federal Reserve this fall to raise rates will have a moderating, but not devastating impact on market capacity for existing-home sales.”
He also noted that rising rates are an indication of stronger labor market conditions, which is beneficial to the housing market.”
“Pent-up supply is being released and existing owners are feeling more confident to place their homes on the market, helping to drive the actual sales level higher and close the gap between market capacity and actual existing-home sales quickly,” said Fleming.
An article in Bloomberg similarly reported that U.S. home construction would also be okay thanks to its solid foundation from an improving job market and growing household formations.
The article stated: “Housing is in a real sweet spot, moving higher but not dangerously so,” said Eric Green, head of U.S. economic research at TD Securities in New York, who projected a 1.2 million pace. “The housing market will be strengthening over the second half. The Fed raising rates will not change that.”
