This Year Could Reverse the Slide for Housing and Auto Industries
If so, don’t get too excited; that will most likely come at the cost of other sectors.
This calls for balloons. At least a few.
Photographer: Patrick T. Fallon/Bloomberg
Households held back on buying houses and cars in 2018, leaving Americans with more to spend on other goods and services. While it’s still early in 2019, it appears this year may flip that script.
The housing and auto slumps were largely a cost story. Trade wars both real and feared increased the cost of some raw materials like lumber, steel and aluminum. Both sectors are credit-sensitive, and the rise in interest rates increased the cost of buying a home or car. And home prices rose, even setting aside interest rates. Faced with these cost realities, households went on a buyer’s strike, foregoing auto purchases and staying in their current living accommodations longer than they might have otherwise.