Questions on Business Decision

The central bank of US is required to raise the rates because of expansion in business, increment in monetary activities and inflation (Boguth, Gregoire and Martineau, 2016). The climb in the rates will influence the United States as well as different nations like Canada who export products to the United States. They are a sign of recuperation and getting to that country (Boguth, Gregoire and Martineau, 2016).

The climb in the rates put focus on the interest rates as the New Home Builder Industry will be forced to raise the price of their homes (Oviedo, 2005). The business will have a sales decrease since numerous individuals will think that its expensive to secure a loan to buy a house out Fed’s decision. For those who may have taken the mortgage already, the total income for the industry will increase. In case the resources used by the industry are imported; the cost of construction of new houses by the industry will be high, which will make the industry to raise the price of the homes to even higher (Oviedo, 2005). Many of the potential customers would rather rent houses for the time being to save. On the other hand, if the industry has been operating on loans as a source of finance, the hike on the interest rates will make the company spend a lot of money for credit recovery (Oviedo, 2005). If the industry has been saving the interest rates will increase, the industry shall have a significant increase in the value of the money saved (Oviedo, 2005).

For the countries whose currency has low rates, they will be compelled to withdraw their importation from the US to other nations which will reduce the income for the US as a result. For the countries whose currency have been higher than that of the United Sates like Japan, the rise in rates shall reduce their monetary value, therefore, reduce their exports for goods and look for other markets (Oviedo, 2005). If the US lose the exports, the cost of the available goods that could be used in industries such as New Home Builders Industries shall be higher (Oviedo, 2005).

Option Two

The home building industry has been developing with the advancement in the customer demands and the progress of technology in the constructions (Apgar & Baker, 2006). Many people are investing so much in the buying of a new home than to rent.

In the recent years, the New Home Builder Industry has adopted prefabrication in their constructions. Prefabrication is a process of buying a complete section of a building from the manufacturers and fixing them directly (Apgar & Baker, 2006). This process saves time, less loss and money. The industry has also adopted Green Construction, that is, the use of environment-friendly material throughout the construction process. The buildings in the urban areas have taken micro apartments owing to the small space. The model involves the construction of houses with some rooms serving multipurpose (Apgar & Baker, 2006). For many years, the building industry has adopted building information modeling which brainstorms the entire development process giving all the required information of every section of the building. That can be done digitally and can be easily understood (Apgar & Baker, 2006).

There have been many disruptive technologies in the home construction industry with the change in the trend in this industry and have replaced whatever technology was there (Koebel, 2008). Building Information Modeling has replaced the two dimensions drafting. The new technology is more accurate and efficient. The technology gives the best layout giving details of space and as well give many options. The electronic engineering technology has also invented components that fit the designed model (Koebel, 2008). This technique is presented digitally unlike the former which was presented in papers. Therefore this model can be loaded and carried to any place of interest. This technology compelled this industry to train many personnel’s who would move with these change in trend (Koebel, 2008).

References:

Apgar, W. C., & Baker, K. (2006). The evolving homebuilding industry and implications for consumers. Joint Center for Housing Studies, Harvard University. Retrieved from. http://www.jchs.harvard.edu/research/publications/evolving-homebuilding-industry-and-implications-consumers

Boguth, O., Gregoire, V., & Martineau, C. (2016). Shaping Expectations and Coordinating Attention: The Unintended Consequences of FOMC Press Conferences. Retrieved from. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2698477

Koebel, C. T. (2008). Innovation in Homebuilding and the Future of Housing. Journal of the American Planning Association, 74(1), 45-58. Retrieved from. http://www.tandfonline.com/doi/abs/10.1080/01944360701768991

Oviedo, P. M. (2005). World interest rate, business cycles, and financial intermediation in small open economies. mimeo, Iowa State University. Retrieved from. https://core.ac.uk/download/pdf/6643016.pdf