Do you have a house for sale in the USA? The last 12 months have seen a number of new trends emerge in the US housing market. While home prices have been on the rise, the pace of new home construction has slowed down.
There has been a generational shift in the homebuyer demographic. Baby Boomers are no longer dominant. Gen Xers are the biggest players in the housing market today, and Millennials have held back, preferring to rent rather than buy a home.
In fact, this has pushed the homeownership rate in the country to the lowest level in over 50 years. The USA is today more a nation of renters than homeowners. It is a country of landlords, people who make money from renting their property; and tenants, people who prefer to live in a rented house or apartment rather than buy a house in USA online.
Indeed, 37 percent of the homes sold in 2016 were acquired by buyers who do not live in them, but prefer to earn a passive income by converting the same into a rented property. Landlords are now among the biggest players in the US housing market, so if you want to sell your house in the USA fast, you should target the prospective landlords, instead of first time homeowners.
Apart from that, another new trend is that home prices have been on the up, recording the highest rise in over three years earlier this March. Svenda Gudell, who works as a chief economist at real estate research firm Zillow says, “Home buyer demand is sky high, inventory levels are near rock-bottom and home prices keep rising.”
David Blitzer, managing director of S&P Dow Jones’ index committee adds, “People are staying in their homes longer rather than selling and trading up. If mortgage rates, currently near 4%, rise further, this could further deter more people from selling and keep pressure on inventories and prices.” Blitzer adds that “there’s no way to tell” whether the prices would cool off in the near future.
One major factor that could drive the housing market in the near future is the entry of Millennial buyers. Millennials have left the nest and they are in a position to buy their first homes. While a majority of Millennials prefer to rent than buy a house, there is still a significant number among them that is eager to buy their first home.
Vishwanath Tirupattur, Morgan Stanley’s Head of U.S. Fixed Income Research says Millennials account for 26.7 million households in the country. He explains in an interview with the Forbes magazine, “One of the key drivers of the forecasted increase in U.S. housing prices is the sheer number of U.S. Millennials ready and able to form new households and buy a new home.”
“Taking this generation's diversity into account, our forecast for household formations over the next five years is 6.50 million to 6.75 million, or 1.30 million to 1.35 million per year, which is over 30% higher than the long-term average rate of household formations,” Mr. Tirupattur adds.