2016 Real Estate Market Trends

Let’s face it; there is not any sector that is more important for the U.S. economy than housing.

Looking at the past few years, the real estate market has been at risk of disappearing, with new options emerging from the corner, and not many new houses being built. But, looking at the current year we are living in, 2016, we can say that things are slowly getting better, but still not in the best shape yet!

Looking at some charts, mostly developed from banks or widely recognized financial advisors, we can come up with few trends. For this year, here is some info to keep in mind:

  • It can be noticed that there is actually a rise in interest for people owning homes, or buying and reselling. Both pretty logical. Apparently, millennials are really into the whole thing of owning a home, while other people are searching for new ways of making money, and with ads being widely spread, both digitally and through some other sources, they decide to try themselves out in the real estate market.
  • The trend that is kind of contradictive to the information we just presented you is that although there is a greater demand for buying a home, there are actually not enough of those. This is mostly blamed on increased regulation or lack of people that are actually interested in working on building one, in the last few months at least. And even the houses that are being built are high end, meaning that some middle-class families cannot get a home, or that a beginner in the real estate industry cannot actually invest. Along with that, it is really hard for middle-class people or families to get financing, making the problem even greater. As for the price growth, it is at 4 % for high-end houses, meaning that it is lower than in 2016, but it is higher for lower-end ones, at 8 %.
  • A fact that might actually interest everyone is that, because of the Brexit pushing Treasury rates, U.S. mortgages could actually reach an all-time low. The rate which has been fixed for almost 30 years, dropped to 3.1 % in 2012, and it is now at 3.6 %, meaning that it is actually at significant risk. Along with that, predictors do not actually think that mortgages will be rising anytime soon.
  • One more trend that has appeared in 2016 is that although there are greater demands for houses, people rarely sell their homes. This is basically a dead-end street kind of occurrence, as one can sell a home, but later cannot find one to buy. Other than that, home values are actually appreciating, with the yearly rate being at 5 %, this being mostly connected with the already mentioned lower mortgage rates.

As for 2017, some real estate predictors are saying that there might even be a recession by the end of that year, looking from a pessimistic view.  However, others believe that the house prices will lower, with the rate being at around 1.7 %, and that the labor market is going to get even stronger, causing an effect that people could easily buy, and later resell a house if wanted.

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