New Case-Shiller data for October and November show that the severe shortages and rising costs have not curbed the surprising strength of home sales; home prices for October climbed 6.2 percent year-over-year from 2016.
Aaron Terrazas, a senior economist at Zillow, says that home builders have started construction on more homes than at any point since prior to the recession, despite high and rising land, labor, and materials costs. Job and wage growth in the U.S. economy has helped build consumer confidence, along with mortgage interest rates remaining near all-time lows.
The housing market’s resistance to these headwinds is a testament to the enduring value Americans place on homeownership. Whether and how long the housing market can continue to defy gravity, and whether the good times last into 2018, remain open questions. For now, the fundamentals driving the market today look unlikely to change any time soon.
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