While interest rates are on the rise, so is economic growth. At this stage in the business cycle, growth has the upper hand. While rising interest rates dampen home buying activity, better growth and the concomitant increase in employment more than make up for it. That is why I expect new single-family construction activity to rise by 25% to 775,000 and multifamily activity to rise by 11% to 382,000.
Tag Archives: Business Cycle
Political Problems Pemeate
A lack of progress over the U.S. debt ceiling and intensifying contagion concerns in Europe (Portugal, Spain and Italy may go the way of Greece and Ireland) have triggered a further flight-to-safety; equity markets are generally in retreat and quality government bonds are rallying. The weak job numbers make the possibility of QE3 more likely; only 18K jobs were created last month as opposed to the usual 180K at this point in the cycle.