National Real Estate Market Update  A lot is happening in the world, and it’s having a direct impact on our housing market. The reality is this: some of it is positive and some of it may be negative. Some we just don’t know yet. In the Fed's Q1 Flow of Funds report, the value of all U.S. owner-occupied homes rose to a record $26.1 trillion, 15% above the 2006 peak. And homeowner equity is up to 60.4%, its highest level since 2002. Great News! CoreLogic's CEO explains, "the country continues to experience record economic expansion," while Freddie Mac's May forecast adds, "existing home sales have benefited from low mortgage rates and a healthy job market." 2017's Tax Cut and Jobs Act also helped. My research has shown that last year, renters on average paid $2,716 less in taxes, homeowners $1,508 less, those disposable income spikes helping boost home ownership. The following three areas of the housing market are critical to understand: interest rates, building materials, and the outlook for an economic slowdown. 1. Interest Rates One of the most important things to consider when buying a home is the interest rate you will be charged to borrow the money. In my recent post I posed the question, “Are Low Interest Rates Here To Stay?” The latest information from Freddie Mac makes it appear they are. We are currently at a 21-month low in interest rates. This is good news for buyers and sellers.  2. Building Materials Talk of tariffs could also affect the housing market. According to a recent article, the National Association of Home Builders reports that as much as $10 billion in goods imported from China are used in homebuilding. Depending on the outcome of the tariff and trade discussions between several countries, there could be as much as a 25% boost in the cost of building materials. 3. Economic Slowdown In a prior blog post on this topic, we began the year with many economic leaders thinking we could expect a recession in late 2019 or early 2020. As spring approached, we reported that economists had started to push that projection past 2020. Now, three leading surveys indicate that it may begin in the next eighteen months. Bottom Line Our overall economy is good. Wages are increasing, home prices are appreciating, and mortgage rates are the lowest they have been in 21 months. I have heard from MANY seasonal renters that they can not find a rental for the 2019-2020 season, so I see signs that our rental market will remain strong as well. Whether you are thinking of buying or selling, it’s a great time to be in the market. If you would like to discuss your unique situation, call or text me at 941-270-0539. | |
