Reasons Why The Housing Market Is Still Booming
The real estate market is not only alive and well, there are some reasons for its continued strength. Find out about the factors that are contributing to this success in this article.
Recent history of the housing market
In the years following the Great Recession of 2008, the U.S. housing market began to rebound. By 2012, home prices had recovered and were on the rise in many parts of the country. The housing market has continued to boom in recent years, thanks to a combination of low interest rates, strong job growth, and limited supply of homes for sale.
As a result of these favorable conditions, home prices have reached new highs in many markets across the country. In some areas, such as San Francisco and Seattle, prices have surged so much that buying a home has become unaffordable for many middle-class families. Despite these concerns, the overall outlook for the housing market remains positive, with strong demand and limited supply expected to keep prices rising in the coming years.
It's no secret that the housing market took a nosedive during the recession. However, it has made a strong comeback in recent years. In fact, the housing market is currently booming! Here are some reasons why:
1. The economy is improving. This is perhaps the most obvious reason why the housing market is doing better. As the economy improves, more people are able to afford homes. Additionally, more people are confident in their ability to keep their jobs, so they're more likely to make major purchases like buying a home.
2. Interest rates are still low. Another big factor driving the housing market boom is low interest rates. When interest rates are low, it's cheaper to borrow money to buy a home. This makes homes more affordable for buyers and also encourages people who already own homes to trade up to larger or nicer homes.
3. There's high demand for rental properties. An unexpected side effect of the recession was an increase in demand for rental properties. More people lost their homes during the recession and turned to renting instead of buying. Now that the economy is improving, many of these renters are looking to buy homes again – which is driving up prices and demand even further!
Why is the housing market still booming?
The housing market is still booming for a number of reasons. First, there is high demand for housing, especially in urban areas. Second, there is a shortage of supply of houses, which drives up prices. Third, interest rates are still low by historical standards, making it affordable for many people to buy a home.
As long as these factors remain in place, the housing market will continue to boom. This is good news for sellers, but bad news for buyers who are trying to get into the market.
Predictions for the future of the housing market
The U.S. housing market is still booming and is predicted to continue doing so for the foreseeable future. The combination of low interest rates, a strong job market, and limited Inventory continues to drive up prices and create bidding wars in many markets across the country.
The National Association of Realtors® (NAR) is predicting that existing-home sales will increase by 3.3% in 2019 and home prices will rise by 4.8%. They are also forecasting that new home sales will jump by 11% as builders ramp up production to meet the growing demand (1).
These predictions are based on several key factors including:
- millennials making up an increasingly larger share of buyers;
- the rise in single-family rental homes;
- continued population growth;
- and the tight supply of homes for sale relative to the number of buyers in the market (2).
Investors are also bullish on the future of the housing market. According to a recent survey by Zillow, nearly half of respondents believe that now is a good time to buy a home, and 65% believe that home values will continue to rise over the next year (3).
With all of these factors working in favor of sellers, it’s no wonder that the NAR is predicting another strong year for the U.S. housing market in 2019!
Conclusion
The housing market is still booming for a variety of reasons. Firstly, interest rates remain low (even though they have risen in the past year), making it affordable for buyers to enter the market. Secondly, there is strong demand from both baby boomers and millennials who are looking to purchase their first home. Lastly, the US economy continues to strengthen, giving buyers the confidence they need to make such a large purchase. If you're thinking of buying a home, now may be the perfect time!
Comments