Boy, some news stories don't change too much. Take this one: Interest rates are roughly at the lowest they've been in some four decades, and construction spending is at records highs. That's true today, but it was also very true five months ago.
Recent numbers from the Commerce Department reveal that overall construction spending increased by 1.2% in November from October's levels. (That translates to an annual rate of $935 billion, seasonally adjusted.) Public construction funded by state and local governments also set a record, while private-home construction popped 2% and office construction, 2.5%. Total construction spending jumped 7.4% from last November to this one.
According to the Associated Press, "Economists are looking for construction activity to remain strong in the coming year because they believe the Federal Reserve will keep a key interest rate it controls at a 45-year low at least until midyear in an effort to ensure that the current economic rebound does not falter."
There are several takeaways for investors here. For starters, if this construction boom continues, we may end up facing overcapacity one day, which may result in lower property values.
Also, even though mortgage interest rates have been increasing a bit over the past few months, they're still quite low. And even if they continue to rise a bit, they'll remain relatively low. So if you've been thinking about buying a home or refinancing your mortgage, it's not too late. When you consider that conventional 30-year fixed mortgage interest rates topped 16% in the early 1980s, even a 7% or 8% rate shouldn't seem so off-putting. (Interesting historical rates)
You can learn a lot about buying a home in our Home Center . It also features some info on refinancing and some competitive interest rates for Fool s. Finally, consider dropping into our Buying or Selling a Home discussion board, where you can get answers to your questions or just eavesdrop and learn from what others are saying.