There are so many signs of strength in the U.S. economy today. It’s seen in an unemployment rate that’s fallen to a low of 4.4 percent, to strong job growth, rising consumer spending, and continued low inflation.
The U.S. Commerce Department recently reported that the nation’s gross domestic product, the economy’s total output of goods and services, expanded at a 2.6 percent annual rate in the April-June quarter. That was more than double the revised 1.2 percent pace in the first quarter.
But there’s another factor fueling the strength in the U.S. economy: the housing market. Gone are the days when the only news coming out of the housing sector involved plummeting home values (and prices), distress sales and rising foreclosure rates.
Today, the housing sector has become a major driver of growth and recovery in the U.S. economy. And it also happens to be a phenomenally good time to be a seller.
That strong housing market is helping the economy in Central Florida as well. That’s true in Tampa Bay, where the unemployment rate is low, job growth is solid, and homes remain affordable.
In fact, Tampa is a great example of how the housing sector is once again helping people build wealth. The industry is creating new jobs in construction, the home building supply industry, and home related spending like landscaping and furniture.
Most importantly, the American dream of owning a home is surging. That’s a key reason why the housing market, nationally and in Tampa Bay, has performed so well in recent years.
Why is this now a Seller’s Market?
People thinking about selling their homes are in great shape today. As the number of prospective buyers keeps increasing, low inventory has helped set the market on fire. Home prices keep rising. Suddenly sellers are not only in the driver’s seat, but are making more money from the sale than at any time since the real estate bubble burst a decade ago.
ATTOM Data Solutions just issued a report reaffirming this. It noted that homeowners who sold their house in the second quarter of 2017 got on average a 27 percent return.
Returns were even higher in some markets, including in California where prices are soaring beyond the reach of potential buyers. In San Jose, there has been a 75 percent return, and in San Francisco, 65 percent.
The study also indicated that on average, homeowners are staying put these days, and taking longer to put their home on the market. The ATTOM data indicates homeowners have been in their homes an average of 8.05 years. That’s the longest average tenure in nearly two decades.
What is the Housing Market’s share of the economy?
Traditionally, housing has been a smaller part of the economy than other sectors. That includes manufacturing, agriculture and business services.
But the actual role housing plays is crucial. An individual or family’s home is often their largest asset. If their home value rises, homeowners can borrow money based on that value.
In fact, speculation that interest rates would move higher may have prompted a recent jump in people applying for a mortgage refinance. Total application volume rose 6.3 percent from the previous week.
The housing sector is an important tool for stimulating economic growth through housing construction. Estimates are that in the U.S., Britain and Canada, housing can contribute between 30-70 percent of their Gross Domestic Product. Housing contributes to GDP through construction of new homes and consumption spending on services related to homeownership.
The housing sector can also promote employment. For each individual home that gets purchased, other industries get a boost.
That includes those selling building materials, tools, furniture and other goods related to either the construction of a home, or furnishing it.
It can extend to other fields: landscaping, home repairs, electrical work, and so on.
Across the country, those industries employ millions of Americans.
A sunny economic outlook
So far this year, the housing sector has been on a roller coaster that just keeps going up, up, up, with no signs of a downward slide anytime soon.
Consumer demand for new homes is holding up solidly, aided by steady job growth.
Single-family building permits, a signal of future housing starts, have gotten stronger since April.
In fact, the U.S. economy revved up in the spring, aided by a surge in consumer spending. Growth in the Gross Domestic Product, from a 1.2 percent pace in the first quarter to a 2.6 in the April-June quarter, was boosted by solid consumer spending on clothing and furniture.
That continued economic growth means that heading from summer into fall, the economy is likely to remain strong – and that’s also true of the housing sector.
Conclusion: What Domain Homes offers buyers
The Tampa Bay region seems to have it all: a healthy economy, strong job growth, and a very strong housing market boosted in part by the fact that prices are still very reasonable.
In Hillsborough County, the median home price is now $260,000 – a far cry from the sticker shock buyers are facing in cities like Los Angeles and San Francisco.
At the same time, Domain Homes remains committed to building homes in the Tampa Bay area. We build in some of the most desirable neighborhoods. We purchase older, run down homes and replace them with brand new ones, which are move-in ready.
In conclusion, at Domain Homes, we understand the desire for achieving the American dream of homeownership. For those relocating to the Tampa Bay area, we know the excitement of being able to live in those great neighborhoods close to the best schools, shopping, and downtown.
That’s why we continue to give those buyers the ability to find new homes that need no repair work in those great neighborhoods, and at prices they can afford.
Call us today at 813-580-8111 to find out more.