There’s an amazing transformation going on before our eyes.
The U.S. housing market is booming, thanks to record low interest rates and social trends accelerated by the COVID pandemic.
Here’s 7 key facts shaping this major industry that you’ll want to factor into your financial planning and share with family members who may be contemplating a move.
- The economy may be struggling, but housing is booming, forming one of the “strongest components of the economy” according to industry experts. That’s important, since housing employs many U.S. workers and is a building block of household wealth.
- Half of all mortgages now are taken out by millennial and Gen Z buyers age 35 or under. (Remember when people said they would never move out of Mom’s basement? Boy, were they wrong!).
- Demand is strongest in the starter home market, fueled by these younger buyers, who have growing families and are looking for more space partly as a reaction to COVID and social-distancing.
- The trend is toward “de-urbanization,” or the movement of people away from urban core areas and toward “exurbs” situated beyond the suburbs. The #WorkFromHome movement is freeing people to relocate and live farther away from their workplaces.
- More people are looking for single-family homes to rent, leading experts to forecast a shortage of available rental single-family homes for up to 10 years. This is despite the number of new homes being built specifically for the rental market.
- As always, there are likely to be winners and losers in the real estate market. Housing prices are likely to go up due to zoning and other regulations, as well as construction labor shortages. The most popular markets will be those that are more affordable and attractive, both in terms of housing costs, job growth, and tax burdens.
- Builders, real estate agents, and consumers have adapted quickly to the new reality of selling, showing and financing real estate properties virtually, evidence that even COVID cannot slow this dynamic industry.
Not surprisingly, many of our recent conversations with clients concern their real estate, and plans to upgrade, downsize, refinance, and relocate. Real estate is an important component of your financial picture. Make sure to include us in the conversation so we can ensure your real estate transactions support your life goals and are stress-free!