The US real estate market has changed dramatically since 2015. New construction has increased and properties are available for sale. The economy has stabilized but buyers and sellers are not jumping into the market actively. Almost everyone is waiting to see how the real estate market will swing before they start investing in properties. Industry experts like Jeff Adams predict that the market will change and a few trends that can already be seen in the market are as follows:
Incomes Are Increasing
As the economy improves, salaries have increased. Singles and nuclear families are now seriously contemplating homeownership. Apart from these sectors, ‘boomerang homeowners’ are also thinking about buying a home. These ‘boomerang homeowners’ were the people who lost their homes during the recession and foreclosure crisis of 2008.
As seven years have passed, their credit histories have been wiped clean of the bankruptcy and they are now eligible for housing loans. With mortgage rates low, the number of buyers entering the market will increase by mid-2015 to late-2015.
House Prices Will Decrease in 2015 But They Will Increase by Late-2015
After two years of abnormally high house rates in 2010 to 2014, housing rates will decrease in 2015. This is because inventory in the form of new constructions have increased. The foreclosure market is also available for homeowners and buyer can choose from new and foreclosed, and short sale properties to invest in.
Furthermore, large investors who were competing for foreclosed properties have now left the market. As a result, small investors and first-time homeowners now have a change of buying property at an affordable rate.
Renters Are Finding It Expensive
Large investors had snapped up property tracts all over the US. These houses were renovated and rented out. Migrating families searching for jobs in the slack economy usually rented homes and this hiked rental rates all over the US. However, this was in 2013 and 2014.
Now, families have started earning more and instead of paying rental rates, they are contemplating putting that money towards buying their own homes. As a result, rental rates may lower by the end of 2015 to early 2016. This will add an additional boost to the real estate market.
Mortgage Rates Are Low
Mortgage rates were hovering around 3.5% to 4% for 30-year mortgages. Buyers can still avail these rates buy industry watchers predict that rates will increase to about 5% or 5.5% in late 2015.
Jeff Adams #1 Real Estate Trainer is optimistic. He states that buying real estate in this market is a good idea before rates increase. As mortgage rates are very low at present, homeowners can easily leverage the equity they have in their existing home to buy a second home. They can rent out the second home and gain sufficient income to pay off the mortgage as well.
However, to achieve this balance, new investors should familiarize themselves with the 2015 real estate market by learning basic math, accounting, and finance to help them deal with the intricacies of the 2015 market.
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