Experts warn of recession risks as home sales, construction show signs of slowing
COLUMBIA, Mo. (KMIZ)
Soaring inflation and rising interests have experts concerned about recession risks coming our way.
One indicator could be in an economy slowed by rising interest rates.
However, experts in Missouri tell Abc 17, they don't anticipate a recession in the state... at least not yet.
"There's nothing that signals to me that there's a major trajectory or change. If you look at the flow of revenues that come into the state government, that's kind of a pretty good indicator especially sales tax of what the consumers are doing and thats been coming in quite strong", said MU economics professor Joe Haslag.
According to the National Association of Home Builders, rising mortgage interest rates could make housing affordability challenging for people in 2022. Experts state this will primarily affect first-time homebuyers who will be hit with higher costs.
Experts warn that higher mortgage rates will slow sales and construction. Data shows that since the start of the year the average 30-year fixed mortgage increased from 3.1% to 4.67% by the end of March. This was the fastest rate increase in percentage terms in decades.
Permits for new single-family home building in Boone County fell between March and April, with an even greater drop seen since last fall.
Some major mortgage lenders have announced layoffs because of demand for home financing that is already dropping, the Washington Post reported.
Higher inflation and business costs, mixed with increasing interest rates will all contribute to the slow economic growth in 2022.
Those economic pressures may be slower to hit Mid-Missouri, though. Missouri Realtors market stats show that interest rates in March saw only a slight increase but continue to remain low.
Ed Scavone, president of Central Bank of Boone County, told 93.9 The Eagle over the weekend that the local market is not yet seeing signs of a recession despite the pressures on the national economy.
"The labor markets really strong right now so um not to say there couldn't be recession or there will be nationally but locally were not seeing a stresses that would indicate any concern right now", said Scavone.
However, nationwide former Goldman Sachs chief executive Lloyd Blankfein warned of a very high risk of a recession. Wells Fargo CEO Charlie Scharf also said there was no question that the U.S. economy is heading toward a downturn.
