Raymond James Economist: Housing Improvement Slower Than Anticipated

Single-family home sales and building permits have yet to reach pre-recession highs

December 21, 2016

The stock market is up and unemployment is down, but the housing market has experienced mixed results since the recession.

Business Insider reports that Scott Brown, the chief economist at Raymond James, wrote a note to clients that said that the “housing bust appears bigger than the boom.” Brown says that improvement to housing recovery is taking even longer than expected.

Single-family home sales and building permits, for instance, have yet to approach pre-recession highs. Brown says that increased material costs and labor shortages have impeded home construction, and that younger adults have delayed home purchases. He even says that low mortgage rates have prevented turnover and have led to a tighter supply.

While it appears that there may be some relief — housing starts and other data appear to show some heating up in the home supply — Brown was not enthusiastic about breaking the limitations. "Mortgage rates have risen since the election," he wrote. "However, as we saw following the Bush tax cuts, upper-income households are likely to take some of their tax savings and buy second homes and vacation homes."

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