Real estate market trends that every investor should understand

Are you contemplating the idea of starting a real estate investing business? Or are you an established real estate investor thinking whether it’s time to go for another rental property? Then you will be happy to know that the clouds are finally disappearing from the sky and the sun is coming out just in time for all those real estate investors searching for deals. However, with real estate investing, the sun doesn’t always stay shining for long. The real estate market is ever changing. One day it’s with you, the next day it’s against you. That’s why real estate investors need to keep a close eye on the housing market and understand the latest changes that are occurring there at all times. You don’t want to miss any chances you might have with finding a great investment opportunity. So, with that said, let’s take a look at the real estate market trends that are dominating the scene in the US right now.

1. An increase in new homes

As real estate developers and home builders are encouraged by higher wages, looser credit requirements, and increased demand from property buyers, the construction of new homes is gradually increasing every year. With so many real estate market trends shaping up the market, investors have a greater opportunity for investments especially with the increase in the availability of new homes. Why is that construction for new homes is gradually increasing? Because of the high demand from so many people moving into the city in search for new and improved economic conditions. New homes are sky rocketing and opening doors for numerous real estate investing opportunities.

2. An increase in mortgage interest rates

We’re all familiar with this trend and know it’s bound to come from time to time. The majority of the members of the Board of Governors of the Federal Reserve System predicted that there will be more increases in the mortgage interest rates coming in 2017. This one of the prevailing real estate market trends will cause mortgage rates to rise, potentially making it more difficult for prospective homebuyers as well as real estate investors to be able to afford the home – or rental property, respectively – of their dreams. But don’t stress too much about this trend, many economists predicate that this increase will be no more than 4.3% on the 30-year fixed rate, which is not too scary.

3. An influx of foreign property buyers

Real estate market trends that are helping drive prices beyond the realm of affordability in places like New York and Los Angeles is the influx of foreign buyers of US real estate properties. This has only increased of late, fueled in particular by property buyers, i.e., real estate investors, from China who are looking for safe places to store their wealth and make more money, away from the slowing economy of the homeland, where repressive financial policies make it difficult to earn decent returns on savings.

4. The arrival of millennials

For a long time, the real estate industry waited for millennials to come to an age where they will start buying houses in big numbers. This time has finally arrived, and now millennials are forming new and hip real estate market trends. According to NAR, in 2016 people under 35 made up 61% of first-time homebuyers. This is definitely one of the many real estate market trends investors should keep a close eye on. As for millennials, here are a few quick tips to keep in mind for those who want to buy a real estate property in 2017:

Prepare and file income taxes early because lenders want to see the latest information about borrowers’ income and taxes.
If you get a tax refund, set it aside for expenses such as a down payment or mortgage closing costs.
Before looking at homes, find an experienced loan officer who’s familiar with the first-time homebuyer down payment.

5. The Trump effect

Some see the Trump presidency as being good for the housing and mortgage markets in the long term, while others see it as bad and say fears of recession could grow with a likelihood that Trump would cut government spending dramatically in his first year, accompanied by stock market uncertainty increasing over just how his presidency will begin. As such, another year of low interest rates could be in the cards. So many articles have been published regarding the Trump effect on real estate. Of all the real estate market trends forming the US housing market at the moment, this is by far the number one real estate investors should keep an eye on in 2017 and beyond.

A final word

The game of chess is not a game of chance, but requires mastery of a complex set of skills that are both art and science. A player needs to be alert, equally aware of the strengths and weaknesses of his/her own position and that of his/her opponent. For sure a plan is needed. The real estate market is without a doubt just the same. Real estate investors need to always keep by with the ever changing real estate market trends in order to play the game of real estate investing correctly and always win to succeed. Learn the housing market, understand its current trends, and make an investment plan in accordance with these changes. Be sure to check out Mashvisor for the latest real estate market trends and the best tips on real estate investing.

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