Market Commentary

Housing industry

Housing Industry

Housing continues to remain strong with December’s housing starts rising to 1.7 million from 1.68 million in November. More importantly, December’s building permits rose sharply to 1.87 million from 1.72 million meaning the future of housing starts should remain strong.

With slowly rising interest rate, as the FED has promised, eventually mortgage rates will be impacted but they will likely rise very slowly. That should result is a housing market that will remain vibrant but easing back and becoming subdued compared to a year ago. Frankly, that is a good result. The FED is walking a tight rope trying to raise interest rates reducing liquidity, but at the same time only tapping the breaks on the economy rather than slamming them. Only time will tell if they get it right.