Which Way Will Homebuilding Go In 2016?

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Conflicting attitudes of optimism and pessimism toward the economy mean the spring selling season will be an important indicator for the housing market in 2016

March 02, 2016

It seems no one is quite sure what is going to happen in 2016 in regard to the housing market. Will 2016 be the first year since the recession where growth in single-family exceeds the growth in apartments? Will a volatile financial market discourage home buying? Is slower global growth something to worry about? Is the economic outlook as weak as the start of 2016 suggests, or is there reason for optimism?

There doesn’t seem to be a concrete answer to any of these questions, but rather hints at the possibilities of what is to come. Pessimists might point to the effect weakness in the oil patch might have on many Texas markets, which is one of the largest new-home markets in the country. Demand in Dallas has held up, but Houston saw some regression, CNBC reports.

Optimists on the other had will likely point to the low unemployment rate and strong consumer confidence, as these two things often times are good indicators of strong housing sales. The unemployment rate currently sits at 4.9 percent, which is as low as it has been since February 2008.

Despite how everything plays out, two recurring challenges in the housing market will remain: affordability and low inventories.

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