Real Estate Market Trends

If you are able to read this, you've probably heard a great deal in the last few days about "Brexit", the unprecedented vote by the citizens of the United Kingdom to withdraw from the European Union. While the short term effects on the British, and indeed the world, economy have been severely negative, there are potential silver linings to be found in the form of boosts to the U.S. real estate market. Keep reading to learn why several housing experts are predicting American gains thanks to British uncertainty.

As home prices continue to rise throughout most of the country, increasing numbers of Americans are choosing to rent, rather than buy, their dwelling. At the same time, rising rents and a lack of low-income rental units have created a perfect storm whereby more and more people are finding themselves devoting larger and larger portions of their paycheck to housing costs. As a result, a record-setting 21.3 million Americans spent more than 30% of their income on rent in 2014, while a staggering 11 million spent more than half. Financial experts generally consider a healthy budget as having up to 30% of income dedicated to housing, meaning that those spending more than 30% are labeled "cost-burdened".

After the Great Recession severely diminished the housing and stock markets between 2007 and 2009, Americans were unsurprisingly hesitant to look at these institutions as reliable long-term investment options. However, fast forward to 2016 and people's faith in real estate has seen a remarkable resurgence! A new survey released by Gallup shows that real estate has widened its lead as the best choice for long-term investment, while other choices have shown either little change or, in the case of one shiny option, a large decline.