Not everyone is struggling in the sputtering U.S. economy. In fact, those who got locked into the housing or stock market years ago are largely sitting pretty. That includes those who bought homes before 2022, and locked in low interest rates while their home value has soared. And those who invested in the markets shortly after the pandemic have seen the Dow and S&P 500 rise significantly to near record highs since then.
But for those still trying to get in to the housing market or stock market, or young people looking for a job, the picture isn't so rosy. Many are waiting on the sidelines, priced out of the market altogether or unsure about when or whether prices or interest rates will improve. "When I talk to our home builders across the country, buyers just don't feel quite comfortable about the economy," says Jim Tobin, CEO of the National Association of Home Builders (NAHB) in an interview with Fox Business. "Yes, there are some good signs out there...inflation is reducing, maybe there's a Fed rate cut coming soon...but they're just not that comfortable."
Tobin adds that, while interest rates will likely come down, buyers will have to get comfortable with a higher base line. "We are hopeful...by 2026 we're below 6 percent, hovering around 5.5 percent....we thing that's the new normal," he says.
In the meantime, he expects many first-time homebuyers and investors will continue to sit out for at least a few more months. "One factor that nobody's really talking about is the November elections," says Tobin. "I think there's a lot of homebuyers who are thinking wait a minute, let me see how November shakes out."
"Because (they) really want to know what the next administration is going to do, whether it's a Harris or Trump administration, to make the economy better and make (them) feel more secure about making that large home purchase."
Photo: iStockphoto