The Flinchum File

Thoughtful Economic Analysis and Existential Opinions
Subscribe to the Flinchum File
View Archives

Shelter In A Storm ?


For those of us who worry about a global economic slowdown, there is one sector of our U.S. economy that should remain largely immune, and that is homebuilding.  First, relatively small amounts of inventory have been added since the Great Recession, while population has increased.  With demand for housing rising faster than the supply of housing, it is not surprising that rents are rising faster than the rate of inflation, especially among Millennials.  This has made builders quite optimistic, with the Builders Sentiment Index reaching it’s highest level in ten years, since October of 2005.  With that confidence, they have been building and building, especially multifamily.  The third quarter of 2015 was 13.1% higher than Q3 of last year.

The faster inflation of rent for Millennials and the record-low mortgage rates should continue to pull them into home-buying.  Of course, having watched their parents or friends’ parents lose their homes in foreclosure, a great many Millennials have been slower than past generations to “put down roots” and buy homes.  Interest rates are not going to get lower, and houses are not going to get cheaper.  The Millennials have some catching-up to do, and that will be good for the country, regardless of the rest of the world!

We are a fee-only advisor providing best interest fiduciary services to clients
in Chesapeake, Newport News, Norfolk, Suffolk, Virginia Beach, Williamsburg, and the surrounding areas of Hampton Roads.


Contact Us Bottom