Despite an unstable stock market, economists predict that the housing market will follow in the labor market’s footsteps rather than the financial market. Per The Wall Street Journal:
However, in order to get there, the article said that the housing market will have to overcome several headwinds, including potentially higher interest rates, volatile financial markets and falling oil prices hitting some oil-rich areas.
This is in addition to housing affordability concerns and a shortage of construction workers.
But on the flipside, the article added that this will likely be outweighed by rising household formation, improving employment and wage numbers and steep rent increases that could start pushing renters to buy.
From the article:
But even if the stock market has a rocky year, he said, that has relatively little effect on demand for homes, which are much more driven by employment, or the economy overall.
If we look at all the metro areas of the country, almost all of them suggest that we should see sustained growth in the coming year,” said David Berson, chief economist at Nationwide Insurance.