Housing Market Update
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As of December of 2015, home –building has started to slip unexpectedly, with declines in both single-family homes and apartment construction. Housing starts, which reflect all of the groundbreakings on single-family homes, have fallen 2.5% nationally. Building permits, which typically are an indication of future building activity, have fallen 3.9%. Economists have expressed great surprise at the weak housing starts data, especially because the exceptionally warm weather this year had been expected to boost building activity in the new year.
 Last year, new housing construction had its best year since 2007, when the housing bubble burst and triggered a recession. Economists were hoping that this linear growth would continue into the new year, which would help to better the economy overall.
 This could potentially mean that people looking to buy a new home could pay a higher price due to low interest rates, a stronger job market, and rising rents, which have created a shortage of supply in the housing market. Low inventory of existing homes accounts for over 90% of the housing market, which has also driven price increases.
 Recently, the Federal Reserve increased short-term interest rates for the first time in nearly 10 years. This could eventually cause the mortgage rates to rise, but rates are expected to stay low for awhile due to policy makers pledging that they will raise the rates very gradually. Hopefully this will keep the mortgage marketplace in check, which will in turn cause housing prices to rise slowly, ensuring that people who would like to purchase a home.
