The Housing Market Today

 At the end of 2022, the housing market was still weakening due to buyers not being able to afford home prices due to the spike in home prices coupled with the rising mortgage interest rates. NAHB Chief Economist Robert Dietz reported that at the beginning of 2023, the 30-year fixed mortgage rate was down from November 2022 to 6.5% from 7.1%.

NAHB believes that around 18 million households have been priced out of the current market. The decline in affordability is clearly reflected in current housing sales statistics: The volume of existing home sales in November 2022 was 35% lower than in November 2021. The Census data shows that new home sales were down 15% on a year-to-date basis.

Along with the pricing and interest rate comes low inventory. More construction is needed over a long-term period. According to the National Association of Home Builders, their new study reports that the current housing market is underbuilt by 1.5 million homes. Single-family builder sentiment, which is measured by the NAHB/Wells Fargo Housing Market Index (HMI), has been falling every month since December 2021. Unfortunately, this has been the lowest reading they have seen since 2012 and close to 62% of builders are offering some form of sales incentives to entice home buyers.

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Five New Rules To Follow When Purchasing A Home In This Current Red-hot Market

 The COVID-19 pandemic played a large part in the current strong housing market. Bidding wars have been predominant for the past year and a half. Now that the interest rates are starting to rise, the competition is getting even stronger. Here are five new rules to follow when buying a home in 2022.

1. Lock in a mortgage before you start your search

In the past, homebuyers would find a home and then get pre-approved. This is not the case in 2022 because of the strong demand. This fast-paced market makes it essential to get pre-approved before you start the homes search process.

“You should be pre-approved by a lender and knowledgeable about your finances before you even begin your home search,” says Beverly Burris, an agent with William Means Real Estate in Charleston, SC. “With houses going under contract as quickly as they are right now, often within days or sometimes hours of going to market, there is no sense in going to see a property before speaking to a lender and learning what you can afford.”

2. Shop for homes priced below what you can afford

Once you get pre-approved you then know how much you can afford. Homebuyers in the past have purchased a home on the high end of their mortgage approval and that resulted in a recession. Today, homebuyers are encouraged to purchase a home below the top of their price range.

“These days, houses are selling for more than their list price and, as a buyer, you’re more than likely going to end up in a bidding war,” Lori Ozley, a manager with Birmingham HomeBuyers explains. “If you look at properties that are under your budget, you’ll have room to submit a competitive offer that goes above the asking price.”

3. If you love a property, act fast

Purchasing a home is a big deal so most homebuyers want to think on it before they make the big leap. Today's market does not afford homebuyers this luxury.

“If you are interested in a property, you must act quickly or you risk losing out to another offer. When you really like a property, you should sit down with your real estate agent, go through the comp research, and work on putting together an offer the very same day,” says Bill Samuel, the agent and investor behind Blue Ladder Development.

4. Put your big number out there from the start

When it comes to purchasing property, negotiations have always been part of the process. This is not the case today in this hot market. Homebuyers need to put their best offer forward at first.

“Be prepared to make your best and final offer from the beginning,” advises Jodi Dougherty, a luxury broker at Downtown Realty Company in Chicago. “Since sellers often receive multiple full-price offers, you may not get an opportunity to counteroffer if you come in too low.”

5. It will probably take multiple tries before you succeed

Don't give up, there are tons of other homebuyers looking at the same homes in the same market. It might take more than once to put your best foot forward and have your offer accepted.

‘You can almost plan on having several offers not go through before one is accepted,” explains Brian Chinn, leader of the Brian Chinn Team at Newberry Real Estate in Tyler, TX. “While that isn’t always the case, it happens more often than not in this market.”

If you are interested in purchasing a new home, contact a Realtor who can help you through the process. “It’s easy to get frustrated,” Chinn adds, “but having patience is key.”

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STRONG BUYER DEMAND BUILDS UP BUILDER CONFIDENCE

 

The latest National Home Builders Association/Wells Fargo Housing Market Index (HMI) reported that builder confidence increased in April 2021. For newly-built single-family homes, builder confidence was at an 83 in April.

The NAHB/Wells Fargo HMI surveys builders’ views on how the current single-family home sales and sales expectations for the next six months. The builder's rate as good, fair or poor. When asked about the traffic seen of prospective buyers, they rate it as high to very high, average or low to very low. Once the data is collected,  scores for each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view conditions as good than poor.

Today’s market is seeing an 88 for current sales conditions even with the high lumber prices and supply chain problems. For the traffic of prospective buyers, there was a three-point gain to 75. As for the different regions the Northeast was at 86 points, the South at 83 points, the West at 90 points and the Midwest came in at 78 points.

“Despite strong buyer traffic, builders continue to face challenges to add much-needed housing supply to the market,” said NAHB Chairman Chuck Fowke. “The supply chain for residential construction is tight, particularly regarding the cost and availability of lumber, appliances, and other building materials. Though builders are seeking to keep home prices affordable in a market in need of more inventory, policymakers must find ways to increase the supply of building materials as the economy runs hot in 2021.”

“While mortgage interest rates have trended higher since February and home prices continue to outstrip inflation, housing demand appears to be unwavering for now as buyer traffic reached its highest level since November,” said NAHB Chief Economist Robert Dietz. “NAHB’s forecast is for ongoing growth in single-family construction in 2021, albeit at a lower growth rate than realized in 2020.”

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Mortgage Demands Still on the Rise

 Mortgage rates have been dropping now for twelve weeks in a row. The last week of November was no exception. Mortgage applications increased 3.9% in volume the last week of November according to the Mortgage Bankers Association’s seasonally adjusted index.

“Weekly mortgage rate volatility has emerged again, as markets respond to fiscal policy uncertainty and

a resurgence in Covid-19 cases around the country,” said Joel Kan, MBA’s associate vice president of industry and economic forecasting.

Refinance applications rose 5% which was the highest since last April. The volume of refinancing was 79% higher than this time last year. In fact, refinance was 71.1% of the total mortgage activity. According to Black Knight, a mortgage technology and data provider, today’s average mortgage rate is about a full percentage point lower than it was a year ago.

The average contract interest rate for 30-year-fixed-rate dropped to 2.92% with the points falling to 0.35 for loans with a 20% down payment. Even with the higher home prices, buyers are still on the winning side with such low rates. Mortgage applications to purchase a home were 19% higher than this time last year.

“Amidst strong competition for a limited supply of homes for sale, as well as rapidly increasing home prices, purchase applications increased for both conventional and government borrowers. Furthermore, purchase activity has surpassed year-ago levels for over six months,” Kan said.

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Third Week in a Row of Record Low Mortgage Rates

Freddie Mac reported the first week in July,  a 3.03% decline in the average rate on a 30-year fixed-rate mortgage. This was a dip from 3.07% the week prior and 3.13% just two weeks before.  In fact, the 30-year fixed-rate averaged around 3.75% this time last year. The 15-year fixed-rate mortgage

reported at 2.51% at the beginning of July, down from 2.56% the week ending June and 3.75% this time last year.

Since the inception of Freddie Mac’s reporting in 1971, the beginning of July 2020 ranked the lowest levels they have seen to date making this the third consecutive week of record lows. The Primary Mortgage Market Survey reported the U.S. Weekly averages as of July 16, 2020, were 2.98% for a 30-year fixed-rate mortgage, 2.48% for a 15-year fixed-rate mortgage and 3.06% for a 5/1-year ARM. Freddi Mac reports that “these low rates have been capitalized into asset prices in support of the financial markets.”

Lower rates are making homes for sale more affordable. Homebuyers are ready to buy as the shut-in orders are lifted. The National Association of Realtors released data showing a jump of 44.3 percent in May of pending home sales. In June home purchases rose 20.7% from the decrease from the pandemic. According to the NAR’s existing homes rose last month to a seasonally adjusted annual rate of 4.72 million.

“The summer is heating up as record-low mortgage rates continue to spur homebuyer demand,” said Sam Khater, Freddie Mac’s Chief Economist.

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Home Loans On The Increase For Six Consecutive Weeks

As the pandemic stay-at-home orders are now being lifted around the United States, more and more people are looking to purchase a home. The mortgage rates have now dropped even more since the pandemic hit at the beginning of 2020.

The 10-year Treasury yield has consistently lead the mortgage rates but this has not been the case since the coronavirus has produced an economic downturn. The unpredictable economy has fueled

unpredictable mortgage rates. On a good note, the parallel between mortgage rates and bond yields is improving.

“Financial volatility has notably decreased in recent weeks, resulting in steady improvements in the stock market, and more predictable — albeit modest — movements in bond markets,” Zillow ZG, 1.50% economist Matthew Speakman said. “The eased strains in financial markets have also resulted in mortgage rates remaining fairly flat in the last couple of weeks and are generally calmer following the turmoil experienced in the early days of the coronavirus outbreak.”

The end of May has shown “the lowest level since Freddie Mac began tracking this data starting in 1971.” Freddie Mac reported the week ending May 28 the average 30-year fixed-rate was 3.15%, a drop of nine basis points from the week before. This will make the third report in a row that has shown historical low-interest rates. The 15-year fixed-rate also dropped to 2.62% which was a drop in eight basis points.

Homebuyers are ready to buy and are looking to purchase a home in the next several months. According to the Mortgage Bankers Association, the amount of mortgage applications has been on the rise making the volume of purchase loans up 54% from early spring. This is a great time to purchase a home and sales should see a rebound from the pandemic.

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Mortgage Rates to Stay Near Historical Lows in May

The Federal Reserve has stepped up to ensure the rates stay near historical lows. During the policy meeting held on April 29th, the central bank said they would keep buying mortgage-backed securities to allow credit to keep flowing.

Jerome Powell, the Federal Reserve’s chairman, says the Fed will keep purchasing the mortgage-backed securities for “the next year or so” with the unknown economic consequences from the COVID-19 pandemic. The Fed said in its most recent announcement that it foresees “considerable risks to the economic outlook over the medium term.”

The Fed has brought a lot of money to the table when it comes to mortgage-backed securities. In a comment, the Federal Reserve relayed this was necessary “to support smooth market functioning.” Before the Fed stepped in, mortgage rates fell during late February but took a turn up in March because of the market turmoil.

The Federal Reserve has purchased more than half a trillion dollars’ worth of mortgage-backed securities since the middle of March. According to the Fed purchasing these mortgage-backed securities has given lenders the confidence that there will be enough money to keep funding mortgages to consumers. The mortgage rates will stay stable because the Federal Reserve is standing in as a reliable buyer.

Luckily there strategy is working. Currently, the average rate on a 30-year fixed-rate mortgage is 3.389%, a 15-year fixed-rate is at an average of 2.923% and the average for the 5/1 ARM is down to 3.117%. During Nerdwallet’s survey of mortgage rates, they found that the 30-year fixed-rate mortgage is 88 basis points lower than this time last year.

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Mortgage Rates at a New All-Time Low

Mortgage rates have been at record lows for a while now, but with a new emergency rate cut from Federal Reserve rates are at historic lows. Now is the time to refinance or buy a home with the half percentage point cut by the Fed this week which puts the benchmark interest rate range at 1% to 1.25%.

“It’s definitely a good time for someone looking to buy a home to get financing,” said Mark Hamrick, senior economic analyst for Bankrate.

Hamrick believes that rates will still go lower. According to Freddi Mac, last weeks are at an average

3.45% for a 30-year fixed-rate mortgage and 2.95% for a 15-year fixed-rate mortgage.

“If you’re trying to look for the silver lining in the midst of the current climate,” said Hamrick, “the mortgage interest rate is close to the top of the list.”

The spring market is looking up with the help of the rate cuts. Those that are on the cusp of purchasing a new home might move a step quicker with the favorable rates. The entire real estate sector, not just individual buyers will benefit.

“Hesitant home buyers will be enticed to take advantage of low-interest rates,” said Lawrence Yun, chief economist at the National Association of Realtors, in a statement.

As mentioned earlier, rates will drop even more but should home-buyers wait for lower rates? Those that are in the market to refinance or secure a new mortgage need to weigh the benefits. According to Mike Hennessy, a certified financial planner with Harbor Crest Wealth Advisors in Fort Lauderdale, “if you can meaningfully save on your interest costs, build equity quicker, or extract equity at a reasonable cost to fund a renovation project, then take the bird in hand today.”

Run the numbers to see if it would be beneficial to refinance. Comparing your current rate with the rate that is being offered on a mortgage refinance will help answer your question.

“If the new rate is 75 basis points (0.75%) lower than the current rate, that it’s generally going to be worth it to refinance after the costs of the refi,” said Cynthia Meyer, a certified financial planner with Real Life Planning in New Jersey.

“If you’re planning to stay in your home, run the numbers to see if it makes sense to refi from a 30- to a 15-year mortgage as well,” she said. “You may be able to pay around the same amount every month and get your house paid off a lot sooner, with lower total interest costs.”

Even with the historic low rates, always shop around. Lenders offer competitive rates and some will include closing cost.

“You shouldn’t assume you’re going to get a good deal from a big bank just because you have your checking and saving account with them,” Danielle Seurkamp, a certified financial planner with Well Spent Wealth Planning in Cincinnati, Ohio said. “Often the smaller, community banks offer the best deals.”


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A 4.1% Rise From November 2018 In Construction Spending

The Census Bureau reported the November 2019 U.S. spending rate for U.S. construction is 4.1% above 2018’s rate for last November. According to the report construction spending amounted to a seasonally adjusted annual rate of $1.324 trillion.

Out of the total construction spending, spending on private construction was 1.6% above November

2018’s and is at a seasonally adjusted annual rate of $985.5 billion. Residential construction spending came in at a seasonally adjusted annual rate of $536.1 in November making it 2.7% up from a year ago.

“Single-family builders are currently reporting ongoing positive conditions, spurred in part by low mortgage rates and continued job growth,” NAHB Chairman Greg Ugalde said. “In a further sign of solid demand, this is the fourth consecutive month where at least half of all builders surveyed have reported positive buyer traffic conditions.

Homebuilders are confident in the current housing market. The National Association of Home Builders and Wells Fargo suggest the sentiment levels are at 70 points making the rate the second-highest level in 2019. The points are 10 points higher than reported this time in 2018.

The positive housing market is expected to continue in 2020. This forecast is based upon the number of applications for new building permits which were at the highest level in November 2019 than they have been in a decade.

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The Nation’s Housing Market To Boost 2020 Economy

Good news for the new year in the nation’s economy sector. According to CNN Business, the housing market is thriving and will continue to thrive into the new year boosting the economy in 2020.

Although the housing market is just a small factor in the boost, it still is important for the economy as a whole. Purchasing a home is one of the most important and largest purchase decisions one can

make. Consumer spending makes up approximately two-thirds of US economic growth.

“The housing market is probably going to be a modest tailwind to the economy,” David Berson, chief economist at Nationwide, told CNN Business.

Catalyst for the boost in the housing market stems from low mortgage rates, a strong labor market with rages that are rising and low unemployment rates.

Mortgage rates  are at a three-year low and home loans are very affordable. The Federal Reserve says it will keep rates on hold for the time being which stands at about 3.96% to 4.01%.

The central bank cut interest rates three times in 2019. The cut makes the adjustable-rate mortgages cheaper according to Lawrence Yun, chief economist at the National Association of Realtors.

The US Labor Department reports the 21st straight month that the unemployment rates have been at or below 4%.

They also reported that wages are up 3.1% over the last year. On average, annual wages have increased 3% or greater every month since the summer of 2018. Unemployment is down near a 50-year low.

The National Association of Home Builders and Wells Fargo reported a 20-year high this December in the Housing Market index. In fact, the Housing Market Index did not even reach this high pre -2008 mortgage crisis.

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Millennials Dominate When It Comes to Homebuying

When it comes to moving more, spending more and buying more, Millennials outpace the older generations.

Millennials have been in the lead for a year now when it comes to purchasing homes. According to , they have acquired more mortgages than previous generations. In the third quarter report, Millennials reached a share of 46% of mortgage originations, and 44% in primary home loan originations. Gen X was only reported at 17% and the Baby Boomers fell to 18% share in mortgage originations. As for primary home loan orginitations, Gen X was at 39% and Baby Boomers hit 16%.

Realtor.com

Several factors are driving the Millennial consumers. According to Porch.com, Milliannials move once every two years. They are also buying more expensive homes and increasing the size of their loans. Realtor.com’s Director of Economic Research Javier Vivas explains that Millennials are getting older, with better jobs and deeper pockets which give the ability to expand their collective purchase power.

Millennials median home price went up this year 6% to $250,000, while Generation X went up 5% and Baby Boomers increased only 2%. Millennials median loan amount is up to $231,590 which is a 7.3% increase from this time last year. Growth in mortgage debt for Millennials is also greater than

the 2.6% by the Baby Boomers and 4% by Generation X.

It will be interesting to see how the Millennials purchasing trend continues in the housing market. So far, Millennials dominate the housing market and it is said this will continue for years to come.

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A Busy Mortgage Market for the Fall

Freddie Mac reported a small bump up in the 30-year rate in their last data released, however it is predicted that the rates will come down this fall. According to the latest data, the 30-year fixed-rate average is now at 3.65 percent with an average 0.6 point and the 15-year fixed-rate is now at 3.14 percent with an average 0.5 point.

Many lackluster economic views are putting pressure on the mortgage rates to fall. Bankrate.com reported that close to three-quarters of economic experts predict the rates will fall this week. The U.S.

Treasuries rose and yields have fallen. The 10-year bond dropped to 1.6 percent at the beginning of Oct. 2019 and just two weeks ago, it was reported at 1.8 percent. When U.S. bonds dip, the mortgage rates usually follow.

“Fueled by low rates and solid home-buyer demand, this fall’s mortgage market continues to be busy,” said Bob Broeksmit, MBA president and CEO. “Mortgage applications for both refinances and home purchases increased last week, and the year-over-year gains were even more impressive. With rates expected to stay around 4 percent, overall activity in the final three months of 2019 should stay solidly above last year’s levels, when borrowing costs were much higher.”

The Mortgage Bankers Association reported that mortgage applications are on the rise. Their report shows an 8.1 percent increase from the previous week’s report. The report also relayed a 14 percent jump in the refinance index and a 1 percent jump in the purchase index.

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Tips to Find the Best Loan for A First Time Homebuyer

There are many different kinds of mortgages to choose when purchasing a home. Not every mortgage is right for you. Here are some tips to follow when choosing which mortgage best fits your needs.
Do your homework. You will want to first research special mortgage programs. There are a great number of programs out there which can assist first-time home buyers. Programs can help with down payments, lower your interest rate or help with other expenses you might have such as a student loan. These programs can help you along the way by allowing you to build equity in your home. Professionals can help with finding the best program to suit your needs, check with your lender or Realtor.

Go with a local. Big programs such as federal programs are more well known but there are many programs for first time home buyers through their city or state. Detroit and Baltimore have used first-time home buyer programs to promote revitalization in their downtown areas. Many states have used

programs to urge first-time homebuyers to purchase their first home in rural areas. Always check your city or state government’s websites to see if there are any programs available to assist you. Another resource would be the community development or housing department.

Don’t overlook your mortgage rate. An obvious focal point is the price of your home. This is not the only thing you should focus on. Your mortgage rate is just as important. This number can tell you how much you will pay in interest every month. The lower the rate, the less you will pay. The easiest way to lower your rate is by a good credit score. Not every first-time buyer has a solid 20 % to put down with an excellent credit score. Many lenders allow you to purchase discount points with can lower your interest rate. Purchasing points is prepaying your interest rate which lowers your overall interest rate by approximately .25%. There are positives and negatives to buying down your rate with discount points. Your lender can help you with this decision.

There’s always an adjustable-rate mortgage (ARM). This can be a great way to start off your first home buying experience. How an ARM works is simple. You will start off with a set period with a fixed rate which will then adjust after a certain period of time. In other words, if you have a 5/1 ARM, you will have a fixed rate for 5 years and then after the 5 years, your interest rate will adjust every year. The rates will not always rise but can also fall. If the rates have gone down you could end up paying less but if it goes up, you will pay more. This is a great way for a first-time to use the first 5 years to improve credit, lower debt and raise your income in order to get a 15 or 30-year fixed-rate mortgage.

Just like an employer interviews for the right employee, the same goes for the right lender. You need to talk to several lenders about getting a mortgage. Shopping around can give you negotiating power and the lowest mortgage rate. You will want to research average rates for your area.

Have your paperwork in order. When applying for a mortgage, your lender will want your monetary life story. Get all your documents together before meeting with a lender. Many lenders will not lock in a rate and start your application until they have all your documents.

Keep your finances the same. Do not make a huge financial change when you are in the process of obtaining a mortgage. Do not apply for a new credit card, get a new car loan, or change jobs. If you do this, the mortgage lender will have to start your application process all over again. You will need to wait even longer to close on your new home.

Getting a loan for a home can be a daunting task but if you do your due diligence, the process will be a lot less painful in the end.

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Too Little or Too Much….

When purchasing a home, the majority of homebuyers will purchase using a mortgage. Your credit and your down payment will affect your monthly payment and mortgage rate. The more you put down the lower your monthly payment will be making it easier to build more equity in a shorter amount of time. Although this is a plus, it can back-fire when a homeowner puts down most of their savings on a down payment leaving no funds for home maintenance or emergencies.

“There’s really no one-size-fits-all solution,” says Jason Speciner, a certified financial planner in Fort Collins, Colorado.

Find a happy balance. Figure out how much you can put down to lower payments without leaving the finances high and dry for those upgrades, maintenance issues, life emergencies or life in general. Here are a few pointers to follow when deciding the amount to put down on a home.

Do the benefits outweigh the negatives? Future homeowners are surprised at the differences in the monthly mortgage payments when calculating different down payment amounts. If a higher down

payment would mean a borrower could avoid mortgage insurance this would definitely be a plus. Mortgage insurance is a monthly expense added on top of the monthly mortgage payment making it a much slower process of building equity. There are times when a higher down payment does not reap any benefits. If it leaves a future homeowner strapped for cash it is just not worth it. If someone just needs to put down 3% for a conventional loan but tries to scrape together 5% to lower the monthly payment it just doesn’t make enough difference and cannot be justified if it leaves a future homeowner strapped.

Always be mindful of the effects a higher down payment will have on your financial plan. According to the Bank of the West’s 2018 Millennial Study, 29% of homeowners between the ages of 21 to 34 borrowed from their retirement accounts to make a large down payment on a home. Taking from Peter to pay Paul is not always the greatest solution. Taking money from your 401(k) is definitely risky. If you loose your job, the money must be put back into the 401(k) before the next yearly tax filing or it will be treated as ordinary income with a 10% penalty. An Roth IRA is not as risky, but when taking out money from your IRA you are losing tax-free growth.

Always expect the unexpected. You always want a cushion to fall back on. Leave some cash in the bank for emergencies. Sadly NerdWallet’s 2019 Home Buyer Report, says that 34% of recent first-time home buyers feel they are no longer financially secure after purchasing their home. Homownership includes many expenses that first time homebuyers might not have planned for. Do not drain your savings on a down payment and closing costs.

Speciner says it best, “Emergency reserves are for ‘Oh, shoot’ moments.”


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Pending Home Sales on the Rise

Spring is not the only thing warming up this year, the National Association of Realtors (NAR) just reported that the pending home-sales rose 3.8% in March 2019 (April 2019 will be released May 30, 2019.)

“There is a pent-up demand in the market, and we should see a better performing market in the coming quarters and years,” said Lawrence Yun, NAR’s chief economist.

The Pending Home Sales Index reported its findings based on a forward-looking indicator of the contract signings which rose to 105.8 in March from 101.9 in February. Yun notes that the increase

The break down by region is contrasting. In the Northeast there has been a decline in pending sales of 1.7% in March to 90.5. In the Midwest however, pending home sales grew 2.3% to 95.3 in March. The two regions with the biggest jump in March were the South which rose to 127.2 (a 4.4% jump) and in the West to 95.1 an 8.7% rise.

So far spring is looking up for the housing market and only time will tell if the selling season will remain a hot market.
has been influenced by the influx of mortgage applications and favorable mortgage rates.


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Interest Rate Increase Expected in December

Interest rates have been driving the housing recovery, as well as the economic recovery in the United States since the housing market dropped out in 2008.  The Fed has kept interest rates at zero for approximately 8 years which has been attractive for both home buyers, new home buyers, and people looking to refinance their mortgages.

As the U.S. economy has recovered at a very gradual, yet very steady pace, the Federal Reserve,

called The Fed, has, within the last year, started to gradually increase the interest rates, once in December, 2016, again in March and then in June, 2017.  During the last meeting of The Fed, October 31st and November 1st, during a two-day meeting in Washington, kept the interest rate the same.  This could be  because a new pick for The Fed chair was expected on Thursday. Rates have stayed within the 1% and 1.25% range, with a rate increase expected in December.

New picks for the chair for the Federal Reserve include the current chair, Janet Yellen, and Jerome Powell, a Fed governor and John Taylor, an economist at Stanford University.

The economy is said to be strong enough to handle another rate increase, especially with the job growth and recovery due to the hurricanes in both Texas and Florida and the wildfires, which have increase restoration construction in California.  In addition, the United States unemployment rate is the lowest it has been since 2001 at 4.2%, and the job growth has increased for the last 83 out of 84 months.

The December increase in the interest rate will not cause a huge disruption in the home building industry as, even with the rate hikes, mortgage rates are still at historic lows.  However, the refinance market has slowed down a great deal once rates rose above 4%.

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