After solid GDP growth of 3.9% in the second quarter, nearly all economic indicators in recent months have pointed to a sizable slowdown. Industrial production has been falling for several months, retail sales are barely rising, and exports fell while imports rose in the most recent month from a combination of a strong U.S. dollar and some big countries either already falling into a recession or very close to it. The GDP in the third quarter, therefore, may barely muster positive growth of only 1%, enough to start the flashing yellow warning lights for the risk of a recession.
As such, how is the housing market playing out and what is the outlook? In short there is plenty of pent-up housing demand to keep the positive momentum rolling. Home sales, new construction, and home prices have all been rising and will continue to rise. In fact, it will be housing market gains that will enable the broad U.S. economy to avoid a recession.
Here are the numbers on this year’s growth over last year’s on a year-to-date basis:
- Existing home sales up 7.9%
- New home sales up 17.7%
- Housing starts up 12.0%
- Median home price of sold homes up 6.4%
- Home price index (FHFA) up 5.5%
- Rents (CPI) up 3.6%
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