The New Construction Housing Market Is Active and Balanced


Naples has seen a slew of new construction record breaking sales in 2017. New communities, golf course homes and developers who build one home at a time are all busy keeping up with the new construction demand.

Despite the fear surrounding rising mortgage rates, builders have seen no drop in demand. On the contrary, many builders have noted a heightened sense of urgency among fence-sitters now that rates have finally started to creep higher. Today’s economic backdrop is much healthier compared to the last time rates ticked up in 2013. Back then, the move from 3.5% to 4.5% was due almost entirely to the Federal Reserve pulling back on its mortgage-backed securities purchase program. This time around, however, rates have risen from 3.5% to 4.1%, largely due to expectations for accelerating economic growth—what we deem to be an organically driven justification for higher rates. As shown in the graphic below, comparing the backdrop for both rate increase periods helps shed additional light on why housing demand remains more resilient this time around: Some of this information was taken from an article called Housing's got a spring in its setp this year written by Rick Palacios Jr.

Warmest Regards,

Kevin Aizenshtat


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