Have you noticed how volatile the stock market has been in recent months? It has taken a lot of hits that have made investors worried about where their money is going in many sectors of the economy, especially those that had to suffer or win because of the Pound being so volatile.
However, one sector that was not affected was housing in the United States, which was surprising to most investors. This is one area of the economy that is rapidly growing and gaining strength, leading to many opportunities to make money and see a better return investment. Why is this? Well, there are actually several reasons, such as:
1. High Demand
There has been a much higher demand for homes over the past year, especially with inventories reaching a 15-year low. Even new housing units that are being built aren’t keeping up with pace, as there were only 1.2 million new homes created compared to the 1.5 million households that formed. With so much pent-up demand, housing is only set to increase in the next few years.
2. Banks are Lending
In the past it was difficult for anyone with less than perfect to get a home loan, but in today’s economy, that’s not the case. Banks are lending to customers in higher numbers than anticipated. In fact, four of the largest banks in the United States have doubled the number of mortgages they’ve created in the last year. What’s even better is that potential buyers are lowering their debt-to-income ratios, which makes it easier for them to get into a home in the next 5 years.
3. Job Security
The unemployment rate has declined a whopping 2.4% and new jobs have reached a 15-year high. To put this in perspective, over 3 million jobs were added to the economy over the past year, with a good portion of those going to individuals ages 25-34, who are likely buying their first homes. As job and wage growth increases in the coming years, more people will have confidence to buy and the ability to as well.
4. Cheaper Homes
Home prices are very affordable right now and mortgage rates are at only 4% on average, which is much lower than it was five years ago. And while those rates might go up in the future, a strong economy with steady wage growth will allow people to still continue with home purchases. In fact, right now it’s cheaper to buy a home in most areas than it would be to rent, making it something that new buyers seriously consider.
Investing in the real estate market right now can be a wise decision, but only if you do your research. Investors much pay close attention to market trends in order to capitalize on them and make the most of their money. Fortunately by doing so, you may be able to buy at the right time and see your money grow well into the future.