Dive Brief:
- As more jobs are created in the U.S., more people will buy homes, economists said in a Reuters poll released Friday.
- For six straight months through July, U.S. businesses added 200,000 jobs -- a trend that will likely give Americans the confidence to buy homes, the group of 29 housing analysts told Reuters pollsters. That prediction is more optimistic than the one economists offered during a similar poll in May.
- Survey respondents also said that the greatest risk to the U.S. housing recovery would be an unexpected surge in inflation, which could force the Federal Reserve to hike mortgage interest rates quickly and consequently deter some would-be home buyers.
Dive Insight:
Interest rates remain low for now despite a sharp increase in late 2013. The experts polled by Reuters said they expect the Federal Reserve to slowly increase rates starting in mid-2015, arguing the move could strengthen the economy without deterring home sales.
"If a rise in mortgage rates comes with a stronger economic recovery, the housing market will be able to absorb it," Bank of America Merrill Lynch analyst Alexander Lin told Reuters.