Maintaining the Economy

 

What should we look for to maintain this economy?

1) Job Growth – Without job growth, you have a weak economy. Locally, regionally and nationally.

2) Gross Domestic Product – GDP is the blood pressure of any economy. Local, regionally, nationally. The healthy rate is between 3.5% to 5%. Too little, too much creates issues.

3) Population Growth – 2.6 people per job move. For every three jobs, historically, one home starts. And so on, and so on for every dependent industry.

4) Consumer Confidence – If consumers don’t believe the economy is getting better, they quit spending. A healthy consumer confidence index number is between 90 and 110. Found at the Consumer Confidence Index.

5) Real Estate – We all know when real estate is doing well; how about when it’s not. When you drive through towns/cities with boarded-up businesses and homes, you know that economy is not doing well. Help wanted signs means employment locally is strong. Therefore there is a need for people to move to fill those jobs.

6) Interest Rates – Rates have been abnormally low over the last 20 years due to low inflation at the same time. Rates will start inching up in 2022 / 23 as the Federal Reserve announces a tapering of MBS (mortgage-backed securities). The statement put them on schedule to hit zero new asset purchases by the end of the first quarter of 2022. Historically this would signal a raising of rates. They made no commitments for interest rate lift-off, but today’s announcement appears to set lift-off for the second quarter of 2022. They left the fed funds rate unchanged for now. The Fed is clearly concerned about inflation; therefore, rates will be raised to slow down inflation if necessary.

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Justin Brickman, Best Realtor

All City Real Estate

Military Relocation Professional

Real Estate Negotiations Expert