As the real estate market can be unpredictable at times, it’s always good to look at several market signs to do housing market predictions. Many real estate experts have done market analysis, which makes it easier to make a statement about future housing trends. This information is useful for anyone that’s currently looking to buy or sell a house. In this post we will look what’s likely to happen in the near future, to the real estate market in the United States.
The real estate market is expected to be very busy this summer. A chief economist working for Realtor.com, says it’s probable that the amount of houses for sale will decrease. When looking at the amount of home listings that Realtor.com had last February, it decreased 11% in comparison with the home listings of February last year. This trend is likely to continue in the coming months.
A good predictor of the economy
The Federal Reserve’s actions can be an excellent predictor of the economy because it has a big influence on the real estate market. Since the beginning of the financial crisis, they’ve kept interest rates very low to encourage people to get a loan. This low rate has been in place during the entire financial crisis to stimulate the economy.
The Fed has always made it clear in their public statements that they are ‘patient’ to raise interest rates. In March of this year however, they dropped the word ‘patient’ from their public statement. According to many, this is a sign that the Fed thinks the economy is strong enough to withstand an interest rate. As a strong economy will lead to more trust and purchasing power, this will have a positive effect on the demand for real estate.
How long does it take to sell a house?
The housing market is currently a buyer’s market, which is very apparent when looking at the online marketplace for real estate Trulia.com. When looking at the listed houses in February of last year, 62% were still for sale a month later. This means that 38% of the listed houses have been sold, or removed from the site for other reasons. Looking at the same month this year, 60% of the houses remained on the market a month later.
The reason that more houses are sold on Trulia.com is that houses in the low price segment are selling more quickly than before. This is a sign that people with a smaller budget are regaining their trust in the economy.
House price expectations
Because the current amount of houses on the market is insufficient, it’s likely for home prices to keep rising in the coming months. The total amount of existing homes for sale last February, has risen 12% compared to last year. This is the highest point since the summer of 2013. The amount of new home contracts have also been rising in February of this year.
All these developments are indicating that demand for houses is going up. This will drive house prices up in the near, and maybe even the more distant, future.