On Thursday, October 6th, the Graaskamp Center hosted the Wisconsin Real Estate and Economic Outlook Conference.
The first Keynote Presentation of the conference, Macroeconomic Outlook and Housing Trends, was presented by Sam Khatar, Vice President and Chief Economist at Freddie Mac. Sam began with a high-level overview of the key trends in the economy and in the housing market. His first major takeaway was that economic (GDP) growth is slowing. Due to fiscal, monetary, and inflationary drags Sam and his team expect declines in government spending, consumer durables, and residential investment. One of the Federal Reserve’s biggest concerns is that inflation is not only impacting assets sensitive to price changes but also assets that are resistant to price fluctuations. Stabilizing these sticky assets against inflation will be a major goal for the fed in the coming months.
Next, Sam talked about the job market, pointing out that half of all states are at record-low unemployment rates. Additionally, wage growth is highest for the lowest income quartile showing that entry-level jobs are having the hardest time finding workers. Sam was very concerned with the lack of existing housing supply along with the shortage of new homes being built. First-home buyers and entry-level housing supply is being hit the hardest with soaring home prices due to a lack of supply and high demand. Making matters worse, mortgage rates are rising at the fastest rate in over 40 years and emphasized the importance of shopping for a mortgage rate to find the best deal.
Sam spoke of different US housing markets and how population growth and migration are key drivers in all markets. Smaller cities like Chattanooga and Knoxville have seen a lot of migration from larger, more well-known cities. To wrap up his presentation Sam spoke on the importance of fixing the housing problem in the US, especially closing the homeownership gap that exists for people of color. Sam opened the floor to the audience and answered questions on areas of climate risk, the shift away from big cities, and slow housing construction.
Access all of the presenters slides from the Trends with Benefits – Trends That Will Define the Future of Real Estate and Housing outlook conference here.