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Strong Employment, Low Interest Rates Help To Swell Demand

June 29, 2017

The nation is experiencing full employment and mortgage interest rates are historically low. Given the conditions, many people want to buy a house.

Zillow reports that the national unemployment rate was just 4.3 percent in May, and that the average interest rate on a 30-year, fixed-rate mortgage was only 4 percent. Over the last few decades, average mortgage rates are closer to 8 percent during periods of full employment.

It’s no wonder, then, that home buying demand is so high right now – in addition to expected demographic tailwinds as the enormous millennial generation ages into its prime home buying years, buying conditions themselves are mostly very favorable. Mostly, but for one small hurdle: The number of homes available for sale isn’t nearly enough to satisfy this huge home buying demand.

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