The housing market is cooling off — and uncertainty isn’t helping – Finance

  • The housing market is losing momentum, while stocks are rising to 2011 highs.
  • The discrepancy between the activity of residential real estate and the rest of the economy can worsen the slowdown.
  • Wage increases can help bridge the gap.

With prices rising to new tax laws, economists say that there are a number of conditions that will slow the growth rate of the US housing market. But there may be a less tangible factor: uncertainty.

The economy is humming, with unemployment for many decades and with increasing pressure on wages. However, despite these reliable indicators, consumers are watching households grow to Highest level over the years.

“Usually, consumers are used to seeing the housing market in tandem with the economy,” said Jonathan Miller, an appraiser and market analyst. "But what has been particularly confusing over the past year and a half is that they seem to be disabled."

Deviations in housing construction and foreclosure rates have led to historical housing shortages across the country in recent years. Along with the growth rates, an increasing number of Americans have been evaluated out of the market.

Meanwhile, according to analysts, tax revision last year Does not help. By containment mortgage deductions and put 10,000 dollars on state and local tax deductions, he destroys the previous provisions, which were intended to induce Americans to their own home.

This can be particularly discouraging for Americans living in high-tax states and expensive housing markets such as New York and California. A recent study by Bank of America Merrill Lynch showed that accessibility was the lowest in the northeast and in the west, with consumers reporting less favorable consumer sentiment in these regions than in the Midwest and South.

“This is not surprising, given the growing gap between what homebuyers can afford and where housing prices stand today,” said Buml. “What is clear in the responses is that consumers believe that the housing market favors the seller this year.”

According to Miller, tariffs add to uncertainty with inflationary pressures and a shift in business activity, raising questions about market value. The Trump administration placed import tariffs of more than $ 300 billion, which caused retaliation from the closest US trading partners.

“It's almost like a wet blanket, where the consumer is somewhat embarrassed and they are choking,” said Miller. "With a sense of urgency in the market there."

An increasingly tough labor market can help bridge the gap. There are signs that Americans may soon begin to see an increase in pay rates as companies compete for employees. But real wage growth has been relatively slow for some time, an increase of about 2.9% on average over the last year.

“One of the missing equations over the past decade has been a wage increase,” Miller said. "If you look at wage growth with inflation, and then on housing prices, there is a big gap."

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