The property market has captured everyone’s imagination in recent times. This is because people connected with it are predicting the return of a housing boom in the U.S. Mortgage rates were reduced drastically in 2019. Additionally, homes have become more affordable, thanks to high-paying jobs and the availability of various other financial benefits. In fact, nothing like this has happened ever since the housing crash that occurred in 2008!
The Crash
Back then, numerous purchasers of properties encountered devastating financial disaster. Several companies went bankrupt. Even homebuilders have been displaying a very cautious attitude towards construction works since then. For instance, around 1.5 million new houses (Census Bureau research) used to show up every year, prior to 2008. However, the figure never went beyond 900,000 after that. As a result, a severe shortage of houses exists today. Thus, the demand is more, but the supply is limited.
Regardless, many economists refuse to lose hope. They feel that if only homebuilders get to work with a will, everything will be resolved. After all, building permits, materials, etc., are readily available. They even believe that there will be a significant influx of buyers in the coming months. The majority of these buyers will be millennials, many of whom are in their 30s right now. Sellers have noticed that the average age when a person decides to buy a house is between 30 and 35. Therefore, over the next ten years, the nation should view many millennials reaching home-purchasing age.
Why is the Housing Market Eyeing Millennials?
As a whole, millennials are far better educated than the previous generations were. Furthermore, many of them are in good jobs/careers, earning good incomes. They are also aware of concepts, such as investments, savings, etc. As such, they should not find it too difficult to spend on residences of their own. In fact, the demand for more housing has been coming from the millennials’ corner, in the past couple of years or so.
Between 2017 and 2018, the purchasing power of the millennials went up by 24%. Then again, they experimented with affordable housing only. Therefore, the trend might continue even now.
The President of the Vantage Mortgage Group echoes similar sentiments. Andy Harris believes that the millennials will be responsible for pressurizing the housing market into increasing supply.
Rick Sharga is optimistic about a million and more properties coming into being in 2019. He is the CEO of a real estate establishment, the CJ Patrick Company. According to him, the job markets are improving, and so is the nation’s economy. Therefore, he feels that if the construction of houses and demand comes into alignment with one another, there will be all-round satisfaction.
Is This Kind of Optimism Justified?
According to the U.S. Commerce Department, August 2019 proved to be the best month of the year. More and more home builders were coming forward to request permits. As per a poll was undertaken by Reuters, the nation expected over 900,000 single-family units to arrive in the marketplace soon. The permits for construction activities had jumped to a rate of 4.5%. The demand for permits for constructing multi-family houses was more. Homebuilders wished to build almost 555,000 units. This indicated a rise in 13.3% of permits.
In turn, the government has been happy to appease homebuilders. Surveys conclude that homebuilders are now preoccupied with constructing both single-family and multi-family residences. Their activities have gone beyond a 12-year high, since 2007. This means that the economy is growing, and people are eager to invest in their own homes. True, homebuilders still face certain challenges in the form of labor shortage, fewer lots allotted for construction, etc. Then again, there are fluctuations in demand and supply, for it seems easy to begin construction, but challenging to complete it. However, all the positive-thinking homebuilders hope to surmount whatever obstacles come in the way!
Therefore, for the family that is eager to live in its own home, the time is now! Mortgage rates are low. Innumerable financial institutions – both public and private – are keen to offer financial assistance. The economy is growing, providing more significant opportunities for lucrative employment. As mentioned earlier, the millennials are the main targets of the housing industry. True, they have learned valuable lessons from what happened years ago. However, the very same experiences will enable them to make wise choices while purchasing their residences. They will not turn their faces away from affordable housing.