7 Factors Driving the Housing Boom
Most of the signs suggest that the American housing market will continue to grow in 2018, continuing its comeback from the Great Recession. Here are a number of reasons why industry experts expect the market to continue going up.
The economy is strong
Unemployment is at its lowest in years and the stock market continues to rise. As a result, people have more money to spend and are able to make larger investments. Luckily for you, the most common and popular investment is a house!
Consumer confidence is high
Low unemployment and economic growth obviously mean there are more people who are able to spend, but perhaps more important from the perspective of a REALTOR® is that American consumers are now expressing confidence about their ability to secure the lifestyle they desire. That means that more people are jumping into the home-buying process and others are looking to sell and upgrade.
Construction costs are rising
The construction industry is facing a severe labor shortage, which means that construction workers can demand higher wages. That has raised the cost of building homes, which of course means that buyers are paying more and agents are getting larger commissions.
More and more members of America’s largest generation are reaching home-buying age. They’re saddled with student loan debt, but they’re still looking to buy homes, ranging from urban condominiums to single-family homes in the ‘burbs.
Boomers are looking to cash in
Now that home values have more than recovered from the big dip they took during the recession, it’s the perfect time for retiring baby boomers to cash in on the homestead where they raised their kids and move to a smaller house or condo.
Simply put, there just isn’t enough housing right now to meet the strong demand from aspiring homeowners. That is particularly true in many hot cities that are attracting professionals in search of high-paying jobs, such as New York, Seattle, Portland, San Francisco, Denver and Austin.
Although interest rates are starting to inch up again, they’re still relatively low compared to many other times in recent decades. As long as the rates stay low, homes remain a very smart investment.