If you haven’t heard, the real estate market is in a massive uptrend. More people than ever are looking for homes, and this, combined with other factors, has led to a record year for almost all real estate markets. As a result, a lot of people see home prices rising but are curious to know the true cause behind the recent boom in the real estate market.
Is it just more people buying homes, or is something else at play? This article will help break down some of the main factors that have led to the recent boom in the real estate market.
Everyone Is Buying More Homes
It seems like everyone is buying homes these days. It is much more appealing to get a mortgage right now than in previous times because of the low interest rates. But the number one cause for the rising demand for homes in the last decade is that the number of new households has increased. When people get married, buying a house tends to be the next step most couples take. Because of this, homes are filling up and staying filled up.
Millennials are driving this trend and buying more houses than ever before. This is good news because millennials have historically been very cautious about purchasing a home. This cautiousness has held them back from buying homes in the past and has caused some to worry about the health of the market in the future. With the new data, it appears homes are back in demand for millennials.
The Real Estate Market is Becoming More Competitive
With so many people looking to buy homes and existing homes selling at high prices, there is a lot of competition. Institutional investors are entering the space, buying homes for the rent checks, and lowering the supply. In addition, demand for homes is at the highest it has been in years. When investors see this demand, they often make investments in the real estate market to make sure they can own a home. One of the main drivers of the home market right now is homeownership rates, as they are on the rise.
Mortgage Rates Are Low
One of the most significant factors in the recent housing boom is the interest rate currently being given on mortgages. The recent low-interest rates and a reemerging economy have caused a large number of Americans to look into purchasing a home. By lowering the price of a house, more people are willing to buy it, leading to a housing boom.
While the real estate market is in a major uptrend, there are a few factors at play. The most notable is the high demand for houses and low-interest rates. This allows many potential buyers to qualify for mortgages that they simply wouldn’t have been able to a few years ago and with a much lower rate.
With more forgiving loans and home prices rising, it’s a perfect storm that has allowed many more people to move into the market. However, it should be noted that people without homes are still in the process of being priced out, especially in big cities. Many other factors have helped drive home prices higher, but these are two of the biggest. These factors, combined with the increase in millennial buyers, have led to the real estate market’s uptrend.