Will Federal Reserve Increases Impact Residential Construction?

In recent years, the residential construction industry has shown great strength not only due to the demand for housing, but also because of consistently low interest rates.  With the Federal Reserve raising interest rates and potential further increases to come, what does that mean for the housing market and, in turn, residential construction?

Contrary to popular belief, rising interest rates actually may not signal a downturn in the housing market and residential construction.  According to some experts in the industry, housing demand still remains high due to the low levels of inventory and production that were borne of the recession in the late 2000s.  In addition, increasing wages and low unemployment levels over the past few years have offset the impact of increasing interest rates and higher construction costs. 

According to the federal government, new home sales in May were better than anticipated, and corresponding gains were noted at construction and home-improvement stores like Home Depot and Lowe’s.  For those who were concerned about facing construction issues due to a forthcoming downturn in the housing industry, recent results point to a healthy and stable market.

You’ve heard our thoughts… We’d like to hear yours

The Schneider Downs Our Thoughts On blog exists to create a dialogue on issues that are important to organizations and individuals. While we enjoy sharing our ideas and insights, we’re especially interested in what you may have to say. If you have a question or a comment about this article – or any article from the Our Thoughts On blog – we hope you’ll share it with us. After all, a dialogue is an exchange of ideas, and we’d like to hear from you. Email us at [email protected].

Material discussed is meant for informational purposes only, and it is not to be construed as investment, tax, or legal advice. Please note that individual situations can vary. Therefore, this information should be relied upon when coordinated with individual professional advice.

© 2023 Schneider Downs. All rights-reserved. All content on this site is property of Schneider Downs unless otherwise noted and should not be used without written permission.

our thoughts on
New Research and Development Capitalization Requirement Shuffles System
Contractors May Benefit From SALT Cap Workaround
Construction Talent Retention
Construction Talent Foundations
8 Bonding and Surety Trends to Watch in 2023
Construction, ESG BY Jay Meglich
Opportunities and Challenges in the Current Construction and Engineering Environment
Register to receive our weekly newsletter with our most recent columns and insights.
Have a question? Ask us!

We’d love to hear from you. Drop us a note, and we’ll respond to you as quickly as possible.

Ask us
contact us
Pittsburgh

This site uses cookies to ensure that we give you the best user experience. Cookies assist in navigation, analyzing traffic and in our marketing efforts as described in our Privacy Policy.

×