Dive Brief:
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Housing economists said Tuesday the housing markets in Texas, North Dakota and other oil-dependent markets could take a hit from falling oil prices. But elsewhere, the price cuts could boost home sales.
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Lower prices at the pump can have “the same impact on consumer spending as a tax cut would,” economist Frank Nothaft of Freddie Mac told an audience of homebuilders at this week’s International Builders' Show. “It should help to strengthen housing demand” because people will have more money to spend.
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In addition, an expected surge of homebuying by millennials and healthy job growth in 2015 will keep the nationwide housing market on its gradual, upward trajectory, the economists predicted.
Dive Insight:
Still, that hit to housing in oil-producing states could be pronounced. Analyst Michael Dahl of Credit Suisse told The Wall Street Journal this week that he foresees a 20% dip in construction in Texas this year—and most of that hurt will fall on homebuilders.