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Four Reasons to Bet on Real Estate

Submitted by Cheryl Bourland on March 15, 2016 - 9:59pm

If you're unsure about the future of the American real estate market, then you're not alone. Many people, including those in the industry, are struggling to predict the outlook in the coming years as the market continues to evolve. In a recent article, National Mortgage News makes the case for a strong and stable future housing market due to four specific factors: interest rates, job growth, Millennials, and boomerang buyers. Keep reading to learn why these signs point to prosperity!

  1. ​Low Interest Rates

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

  1. Strong Job and Wage Growth

After reaching 10% in October of 2009, unemployment now stands at a comparatively-small 4.9%. This fact, combined with February's 2.2% hourly wage growth compared to the same time last year, indicates that more people will be able to afford entry into the housing market.

  1. The Rise of the Millennials

​Despite the rumors of a "generation of renters", the Millennials are finally beginning to realize the benefits of home ownership. Many factors, including growing up during the 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.

  1. 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.

Source: Four Reasons to Be Enthusiastic about the Housing Market