The past few days have been interesting. Home construction is up, but new home sizes are much smaller now. I expect this is the new normal. Rates have dipped below 5% at least briefly. This should give new momentum to the resale and new construction market but is likely to wane as rates rise. At the same time foreclosures are surging, short sales are surging, and affordability has never been better for investment.
On the economic front corporate profits are surging, consumer debt continues to fall, the federal deficit dropped, and there is more good news than anyone anticipated. Economists are predicting limited likelihood of a double dip.
Some trends (some already noted) that should figure into our reaction to this are the following:
- New home sizes are down dramatically,
- New home construction remains significantly below the normal required inventory level,
- Rates will tick up as the fed withdraws from the market and globally capital moves toward equity,
- Large homes are lagging in the market,
- Condos are struggling to find debt
In these trends are real opportunity for rental home buyers.