Four Good Reasons for a Strong Housing Market

If you're unsure about the future of the U.S. housing market, then you're not alone. Even among real estate professionals, there is disagreement regarding the industry's outlook in the coming years as the market adapts to new conditions and buyers. In a recent article, National Mortgage News makes the case for a strong and stable future housing market by discussing four positive factors: interest rates, job growth, Millennials, and boomerang buyers. Keep reading to learn why these signs point to continued prosperity!

​Low Interest Rates

​When the Federal Reserve rose interest rates back in December, many people feared that it would signal the beginning of the end of the housing market recovery. However, despite the increase in federal rates, mortgage rates have remained at historically low levels nationally. In addition, further increases to the federal rate appear to have been delayed until at least June, locking in these low mortgage rates for the Spring buying season.

Strong Job and Wage Growth

After reaching 10% in October of 2009, unemployment now stands at a manageable 4.9%. This fact, combined with February's 2.2% hourly wage growth compared to the same time last year, indicates that increasing numbers of people will be able to afford entry into the housing market. This will be especially true if there is any relief of the ongoing inventory shortage, which would slow the rise of home prices.

The Rise of the Millennials

​Despite talk of being a "generation of renters", Millennials are finally beginning to realize the benefits of home ownership. Many factors, including growing up during the Great Recession, low housing inventory, and large student loans, have only served to delay this influential group's entry into real estate. Millennials are now the nation's largest generation, and their oldest members are only in their mid-thirties. Together, this means that a huge number of new families will be looking to buy a home in the coming decades.

The Return of the Boomerang Buyers

​Many of the millions of people that lost their homes during the housing crash have been patiently waiting for their second chance at home ownership. Now, having rebuilt their credit, these boomerang buyers are finally returning to the real estate market. This should present itself as millions of extra buyers in the next several years as lending restrictions ease.

There you have it, four reasons to remain optimistic about the housing market in 2016 and beyond! With extremely low mortgage rates, falling unemployment, and surging numbers of Millennials and boomerang buyers looking for a home, the only real issue is likely to be building/listing homes fast enough to meet demand! 

 

Source: Four Reasons to Be Enthusiastic about the Housing Market

Suburban Realty Professionals  ♦  Princeton Office  ♦  96 Wall Street  ♦  Princeton, NJ 08540  ♦  877-221-8787