John Seggerman Discusses the Outlook on US Real Estate

Why is the Outlook on US Real Estate Important?

If you are planning to either buy or sell in the US real estate market and you want the best results, you need to understand it’s estimated outlook. For example, if you believe that the US real estate market is going to heat up, you may want to wait to sell your home so that you can earn a higher price with a shorter sale time. Similarly, if your view is that US mortgage rates are going to rise in the near future, a mortgage professional may advise that borrowing now rather than later can save you substantially over the course of your mortgage term.

Simply put, the current outlook of the US real estate market should be an essential part of your research as a real estate consumer, along with other important matters such as surrounding amenities and the physical state of your prospective home.

What is the Current Outlook on US Real Estate?

Overall, the US real estate market looks promising at this point in time, for the following reasons:

  • First and foremost, the US economy continues to strengthen even as the economies of other developed countries are starting to slow down. For example, the US economy grew by 2.3 percent in the second quarter of 2015, which is up from a growth rate of 0.6 percent in the first quarter. Similarly, the US unemployment rate currently sits at 5.3 percent, which is less than the 5.6 percent in 2014 and 6.7 percent in 2013. In effect, this means that more and more people in the US have the income to purchase real estate as well as the confidence in the US economy that compel them to make such purchases. These factors increase demand in the US real estate market.
  • Second, even though the US economy has strengthened, the Federal Reserve has not chosen to raise its interest rate thus far. As a result, US mortgage rates remain low, which serves as an incentive for US real estate consumers to buy now rather than later when US mortgage rates are likely to rise. This is particularly true because current mortgage rates are largely the result of the Great Recession, which is unlikely to be repeated in the near future.
  • Third, higher prices in the US real estate market are convincing a wider range of real estate owners to sell. This is important because a wider range of real estate properties for sale could result in more buyers entering the real estate market to take advantage of the increased selection.
  • Finally, the US is seen as a safe haven for investment. Since countries such as China, Russia, and some members of the European Union are beset with economic issues at the moment, international investors are searching for safer shores. Combined with political instabilities in the Middle East, it should come as no surprise to learn that the US real estate market is becoming more and more popular as a choice for foreign investment.

This blog post should not be construed as professional investment advice. Consumers are encouraged to consult with licensed, professional advisors before making any decisions regarding their finances.

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