Recession coming? Don't blame housing
NBC Oct. 8, 2019, 3:46 PM EDT By Martha C. White
Housing triggered the last recession. This time it's doing well, but not well enough to stop the next downturn.
Builder confidence in September was the most optimistic it has been in the past year, and August housing starts rose to their highest level since May 2007, according to the National Association of Home Builders. Home construction is up and borrowers lured by low rates are piling into the mortgage market.
A key driver is Fed activity — lower interest rates make mortgages more affordable and increase homeowners’ buying power.
Usually, interest rates don’t come down until the economy is already in trouble and people are less willing to buy, making this somewhat of a Goldilocks moment for housing.
“Right now, we’ve actually got the best of both worlds. We’ve got mortgage rates that are extremely low but an economy that’s doing fairly well,” McBride said.
In thriving economies, home buying triggers spending in industries as diverse as construction, financial services and retail...click here to read more