Hardware Retailing

DEC 2017

Hardware Retailing magazine is the pre-eminent how-to management magazine for small business owners and managers in the home improvement retailing industry.

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Page 42 of 70

HARDWARE RETAILING | December 2017 38 Hardware Retailing (HR): What trends have you seen develop in the 2017 U.S. housing market? George Ratiu (GR): This year, the housing market saw pretty solid demand, especially during the first half of the year. From the midpoint of the year on, there was an extremely tight inventory, both for new home sales and especially for existing homes. A lot of buyers are finding a very tight market, which prevents them from buying homes, and in turn, lowers sales. Just as importantly, we've seen a pickup in sale prices each month this year. HR: New housing starts and existing home sales are increasing slightly over 2016 levels. What does that say about the housing market? GR: There's sort of a domino effect at work here. Many homebuilders are not building enough new inventory, so first-time homebuyers are finding it increasingly difficult to enter the housing market due to higher prices and more competition. HR: In August, housing prices reached their 66th consecutive month of gains. NAR said high prices have prevented many prospective homebuyers from entering the housing market. How might continually rising existing home prices impact the housing market in the long term? GR: Rising prices are good and bad. They're a reflection of market dynamics. But when we look at price trajectory from the perspective of a growing population, comprised mostly of Generation X, millennials and Generation Z, rising home prices, mortgage prices and high student debt, then accelerating home prices will harm the housing market in the long term because first-time homebuyers simply won't be able to afford it. HR: How do you foresee tax reform impacting the housing market? GR: For homeowners, tax reform is a very important issue. As the proposal currently stands, it's likely to have an impact on the prices of homes across Checking the Foundation of the 2017 Housing Market A Q&A With George Ratiu Solid demand and steadily increasing home prices have been two of the biggest housing headlines in 2017. To learn more about housing trends this year and predictions going into 2018, Hardware Retailing spoke with George Ratiu, director of quantitative and commercial research at the National Association of Realtors (NAR). He oversees a portfolio focused on macroeconomic trends, commercial real estate and global investments. Overall, Ratiu and his organization maintain a moderately optimistic outlook for the 2018 housing market. Housing Market Outlook

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