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The Future of the US Housing Market

By: Elite Legacy Education, March 1, 2017

The Future of the US Housing Market

 

There is no doubt that President-Elect Donald Trump’s win will have effects on the U.S. market. One industry of particular interest is the U.S. housing market. It is thought that the market will likely continue to grow, but not at such rapid rates as it previously has. Of course, some areas will still remain hotter than others, growing relatively more. Some of the major reasons that support this forecast are as follows.

 

Generation Y is reaching its peak home buying years in terms of age and income. This reason is first and foremost what will lead to a strong future housing market in the United States. As the next generational wave of U.S. residents get ready to buy homes in the upcoming years, the level of real estate transactions is only expected to rise. This generation has also been found to have higher standards when it comes to housing. Specifically, they don’t want to experience a rundown first home and are willing to save more money to buy a nicer place. This means that larger sums of money will eventually be spent on housing purchases by this generation.

 

Trump aims to increase access to affordable housing. Specifically, the Trump administration promises to loosen the current stringent credit requirements for U.S. residents. It is thought that by easing these regulations, housing purchases will rise. Particularly, this will be fueled by those who are currently locked out of the housing market due to current credit restrictions. So long as credit requirements do not become too lax as they did in the previous real estate bubble, the U.S. housing market is positioned to prosper from this. Essentially, there are many aspects of the Trump administration’s agenda that could increase consumer confidence and spending in the housing market.

 

Future increase in demand will level out the current seller’s market. Over recent years, the U.S. housing market has been described as a seller’s market. This makes sense when you consider our previous discussion about stringent credit requirements. Do you think this could have anything to do with the activities leading up to the previous real estate bubble? Regardless, an increase in demand will help to level out the playing field and bring a sense of balance to the housing market.

 

Mortgage rates are slowly on the rise. Although mortgage rates may not be increasing dramatically, a gradual increase may push people to purchase sooner. If individuals contemplating a home purchase wait too long, they could eventually be subject to higher interest rates. This is unappealing to everyone. After all, why would you want to pay more than necessary in interest payments?

 

A sense of optimism among building companies. It’s always a good sign when building companies show optimism by planning new developments. After all, why would builders want to undertake capital-intensive projects if they were uncertain as to whether the future housing market can support them? Since developments are so capital-intensive in nature it requires tying up significant cash flows. No smart businesses would want to tie up additional cash flows unless they were fairly certain that a return could be realized.

 

Given these factors, there is reason to believe that the U.S. housing market will remain strong into the future and even improve upon its current state. With that said, today's market is filled with many opportunities for the savvy investor. Our Rich Dad Education trainers will introduce you to proven strategies that can help you launch your career as a successful real estate investor and develop a "Rich Dad Mindset." Be sure to learn about all the ways Rich Dad Education can help you reach your goals.

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