There are so many factors that influence the real estate market, so it can be challenging to make accurate predictions. Everyone is definitely curious about what the future will hold! A recent Fortune.com article explained what causes the real estate market fluctuations and outlined some predictions.
Population and wage increases, as well as the tastes of the millennial generation, which is beginning to enter the housing market, will boost home sales. As of late 2014, the Census Bureau reports, 23-year-old Americans is the largest population group in the country, followed by 22-year-olds and 24-year olds. As this large sector of the population gets older, they’ll start forming families and looking into home ownership. Perhaps 2015 will be the first year that the millennial generation’s presence in the housing market makes a real impact.
The millennial generation is important in the housing market because for the past 10 years or so, the largest part of the population were the Baby Boomers, most of whom already settled down and started families. They weren’t buying or selling many homes, so the onset of the millennial generation will give the housing market a noticeable boost in activity.
It looks like the construction of single-family homes will continue to be stagnant or decrease. This is partially caused by the fact that millenials prefer to live where housing is more expensive and building is difficult, such as major cities like New York, Honolulu, and Austin.
Mortgage rates will likely rise as the economy recovers, though probably not by much. It depends on how the economy does worldwide and domestically. Now that there isn’t a stimulus from the Federal Reserve, mortgage rates may also increase because of that.
The most popular real estate markets will be unaffordable for the middle class. It sounds rather drab, but it’s likely true. The housing market has rebounded for the past few years after the market crashed from around 2006–2012. But now that the rebound is basically over, home values are starting to decline again. It’s not all bad news, though—rising mortgage rates and the millenials’ presence in the market may very well save the housing market from declining too much.
No one knows what the future will hold—but no matter what, Americans will need housing. Most people consider home ownership a key part of the American dream, millenials included. Whatever happens in the housing market, you can count on [business] to work hard for you and give you impeccable service, whether you’re buying or selling a home. Sell or buy, work with Ty for amazing results, no matter what the national real estate market is doing.
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