NVI Technical College Information

Economic Feasibility

Don ’ t be too worried, however; some research suggests that

with a quarter of nonretired adults saying they had no retirement

homeownership patterns for younger families aren ’ t that different

savings. As the population ages, many people are likely to find it

from those of previous generations.

difficult to afford the retirement they expect.

Our forecast shows the fall in residential construction continuing

Housing

through the end of this year. Housing construction is then forecast

The housing sector outperformed the broader economy in the wake

to bounce back, but only modestly; by 2025, housing starts reach

of the pandemic, as buyers and sellers found ways to navigate the

A

our estimated equilibrium of about 1.5 million units per year.

pandemic ’ s restrictions. Then the tables turned. As the Fed raised

interest rates and inflation appeared, long-term interest rates moved

Demographics suggest that housing is not likely to become a key

up dramatically. The result was a decline in housing starts from 1.7

driver of economic growth in the foreseeable future. Population

million (at an annual rate) in Q1 2022 to less than 1.4 million Q1

growth has slowed to less than 0.5% per year (compared to over 1%

2023. And house prices, which rose sharply starting in the middle of

during the housing boom in the 2000s). The baseline forecast

2021, appear to have stabilized, at least for the time being.

assumes that, after the recovery from the current housing downturn,

housing starts will begin to fall. Faster medium-term growth in

The runup in house prices created a huge housing affordability

housing would require faster population growth, most likely from

problem. Unfortunately, the moderation in house prices over the

immigration. Otherwise, the heightened demand for housing during

past year won ’ t solve the affordability problem because mortgage

the pandemic is likely to be a short-term phenomenon.

rates have moved up substantially.

Source: Deloitte

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