In this blog post, we will discuss the impact of climate change on the real estate market and how it affects real estate agents. Read on to find out...
Market Watch: Things Are Looking Up For the Housing Market
The housing market is experiencing better mortgage rates. The trend is driven by numerous factors, which is something to note. Read on to find out more!
Well, would you look at that: the housing market is showing signs of life and things seem to be looking up!
The housing market is currently experiencing a period of growth, with prices rising at an unprecedented rate. This market trend is being driven by numerous factors, with some of them being lower mortgage rates, a strong economy, and a lack of available housing on the market.
Lower mortgage rates
One of the key drivers of the housing market is the current lower mortgage rates. The Federal Reserve has kept interest rates at historic lows in the past in order to stimulate the economy and encourage borrowing. This has made it more affordable for people to purchase homes, which has led to increased demand for housing. With higher fed rates it has pushed rates to all time highs but we can see rates coming back down into the 5%-6% range.
(Charts from Nerdwallet)
Based from these charts from Nerdwallet, some key lower mortgage rates to look at are the 20-year fixed-rate at 5.868%, the 15-year fixed-rate at 5.423%, the 10-year fixed-rate at 5.160%, the 30-year fixed-rate FHA at 5.562%, and the 30-year fixed-rate VA at 5.375%.
The strong economy
Another factor that is contributing to the housing market’s rapid growth is the strong economy. The unemployment rate is at a 50-year low, and wages are rising. This is giving people the confidence and financial means to make large purchases, such as buying a home. Additionally, the stock market over the last 10 years has been performing well, which has also given people more disposable income to invest in real estate.
Lack of available housing
A third factor that is driving the housing market is a lack of available housing. As the economic principle stands, more demand = less supply. The population is growing, and the number of new homes being built is not keeping pace with demand. This, in turn, has led to a shortage of housing, which is driving up the prices of homes. Additionally, the pandemic has accelerated the trend towards remote working, which has increased the demand for homes in less urban areas.
But wait, is there cause for concern?
With lots of highs comes lots of lows as well - some first-time home buyers, and those with lower incomes, have cause for concern with the rising home prices. The high prices can make it difficult for these groups of people to enter the housing market, which can have a negative impact on the economy. Additionally, the high prices can put a strain on the budget of those who are able to purchase a home, leaving them with less disposable income to spend on things they would usually be allocating budget for.
However, despite these concerns, the overall outlook for the housing market is positive. The economy is strong, and the lower mortgage rates are expected to continue, which will continue to drive demand for housing. Additionally, the lack of available housing is expected to be addressed in the coming years, as more homes are built to meet the growing demand.
It's worth noting that while numerous articles have been talking about the growth of the US housing market, similar trends are also being observed in other developed countries. Low interest rates, strong economies, and increasing populations are also driving up housing prices in these countries.
In conclusion, the housing market is currently experiencing a period of growth - driven by lower mortgage rates, a strong economy, and a lack of available housing. While this has caused concerns amongst various groups of people, being the first-time home buyers and those with lower incomes, the overall outlook for the housing market is and looks like it will continue to be positive. As always, it is important for us to keep an eye on the market, and when in doubt, consult with professionals before making any large financial decisions.
Thank you for taking the time to read this blog post! We love getting these out for you guys. If there are topics that you want us to write about, feel free to type them down in the comment section down below! We get new blog posts up every Monday, Wednesday, Friday, and Saturday, so stay tuned for new content coming your way.
We'd also like to give credit where credit is due, and list down the websites that provided us with the insights and inspiration for this blog post. If you enjoyed our content, please do check out their articles as well:
Nerdwallet - https://www.nerdwallet.com/mortgages/mortgage-rates