This is due to a variety of factors, with low interest rates, a strong job market and an influx of millennials coming into the market being some of the primary drivers. The article then goes on to explain how these factors have led to an increase in home purchases, as the prospect of a crash within the housing market has become less likely than it was in the past.
As of late 2018, the national median home price had been on a steady rise since 2015, having risen by 7.9% overall. This growth was further fueled by a decrease in mortgage rates, which fell from 4.54% in October 2018 to 4.38% in November 2018. This decrease made it even more affordable for potential buyers, as the low rate ensured that they were able to secure a more affordable monthly repayment. This uptick in demand has also caused rents to increase, with many renters finding it cheaper to buy a house instead.
The article also states that millennials, who are aged between 18 and 34, are making up a larger portion of new homebuyers in recent years. This is likely due to the fact that this age demographic is beginning to enter their prime earning years, and are now able to afford to purchase a house. Furthermore, the article mentions that millennials are particularly drawn to the urban lifestyle, and therefore often opt for smaller residences located in cities. This trend has led to an increase in prices for properties in cities, and has caused them to appreciate much quicker than those located in other areas.
The article concludes by stating that although there is still much uncertainty surrounding the future of the housing market, with the current factors in play, the likelihood of a crash is much lower than it was prior. This is good news for anyone looking to purchase a home, as the attraction of being able to buy is now higher than ever before.
In recent years, the housing market has been on the rise as a result of a multitude of positive economic factors. Low interest rates, a strong job market, and an influx of millennials entering the market are some of the primary factors driving growth within the industry. These factors have all had a positive effect on home purchases, as the fear of a crash within the housing market has faded significantly.
The national median home price has increased by 7.9% overall since 2015, and has been bolstered by a sharp decrease in mortgage rates. This decrease has made it much more affordable to purchase a home, as borrowers are able to take advantage of low monthly repayments. Additionally, high rent prices have caused many people to opt for buying, as they can potentially save in the long run.
Millennials have also been playing a bigger role in recent years, as they make up a larger portion of new homebuyers. This is likely due to the fact that millennials have now reached their prime earning years, and are now better equipped to purchase a home. Many of these buyers are attracted to city living, which has driven up prices in these areas and caused them to appreciate much quicker.
Although there is still much uncertainty in regards to the future of the housing market, the current factors in play render it less risky to purchase a home today than it was in the past. This has caused the attractiveness of purchasing to reach new heights, as buyers are now able to acquire more property for their money, and are no longer as fearful of the market crashing.
This article was contributed on Oct 21, 2023
