Buying a house from one’s own income is perhaps the most common dream of peoples around the globe. If you think that now you are financially sound enough to join the brigade of house owners you might consider understanding the market condition before investing in a house. We appreciate your rationalism of doing research before making the big investment so we have compiled this article regarding the expected housing market trends of US in 2018.
- Nation Wide Analysis – Although market cannot be judged accurately by any means, experts expect the housing prices to rise gradually in 2018. This expected market rise in 2018 is not a speculation but is generated through past experiences. It has been a good decade from the point of view of the real-estate marketers with a steady growth of 5% to 6% every year after 2008. The year 2008 witnessed a downfall in the real-estate market, a not-so-common trend for this market. When we look up at the longer period in past then we can see that annual increment in the housing sector used to be around 3%. So yes the past decade has shown higher growth rate than normal but it isn’t a bubble in housing sector because from 2011 the market has shown very stable growth.
- City wise analysis of the trend – Although the nation-wide analysis is important you cannot take a good decision without knowing details of the cities as each city may have different trend from the others. Talking on a wide range – Cities in the west coast have experienced much higher appreciation in the house prices since 2011 while the cities on the East coast have seen comparatively less appreciation. While doing comparative analysis with certain other factors experts have come to the conclusion that the cities with larger population and better economic growth have experienced a much higher rise in house prices as compared to economically backward and less populated cities. However, New York, Boston, Chicago and Washington DC have seen slower price growth after recovering from the market downfall.
- Analysis of the changing demographics – It is quite intuitive that high growth rate in the housing market is not a good news for the prospective buyers. The first time home buyers are generally attracted towards lower-priced starter home but they are not getting the opportunity. Do you ask why? Because the people who already own this house are not capable of buying their big dream house and so they are not opting for a trade-up. The market is especially rude to the millennial people as they are approaching the prime home-buying age but they are not financially strong enough to buy their first home. It is not only about buying a home due to price appreciation in the market the owners of houses have also increased house-rents making life tougher for those who do not own a house.
- Change in the lending standards – The lending industry of the nation came up with many new regulations after suffering damages due to the Great Depression. They have become much more conservative by raising their bars of lending standards. The result of their conservativeness is clearly visible in the market – the number of prospective borrowers who qualify for housing loan has been significantly curtailed. There are many prospective buyers who are financially ready to own a house have been cut out of the market. It cannot be said with certainty but these financial constraints may get relaxed in near future opening doors for many worthy buyers. Once these buyers will enter the market the demand will increase in comparison to supply and the market will get relaxed (assuming other factors to be supportive of the demand).
- The Mortgage interest rate – The Federal Reserve is continually tightening its monetary policies giving the clue of increase in the mortgage interest rates. There are many in the markets who are seriously concerned about the increase in the mortgage interest rates during 2018. But, it is not clear when is this increase in mortgage interest rate is going to happen as it has been quite a time since we are hearing this prospective hike in interest rates. But, this presumption in the interest rate increase can significantly hurt the market. There are many experts who argue that the Federal Reserve policy change may take years in implementation and even though it gets implemented it won’t affect the housing sector much.
Your decision of buying a house will be affected by many circumstances; the experts at https://highreturnrealestate.com/real-estate-investment-group/ suggest that it is not a bad time to own a house if you plan to keep it for some years.