The economy is finally showing signs of life and real estate is following suit. Let’s take a look at what the real estate experts projected at the recent Realtor® Party Convention & Trade Expo.
Lawrence Yun, chief economist for the National Association of Realtors started with challenges facing the real estate market. The population in the United States has been growing steadily, but job creation has not, and sales of houses in relation to population have also been below normal since 2008.
Limited access to credit, fewer houses on the market, and most recently, home price increases with higher mortgage rates have subdued the real estate market. But the rise in home equity has also had a positive impact, pushing 3.5 million homeowners above water, nationwide according to Inman News. The median gain to home equity is expected to be $40,000 over three years.
Much of the success of the real estate recovery will hinge on the participation of young first time home buyers who are having a really tough time in this economy. Yahoo recently looked at the problems facing these young people in Why jobless millennials are killing housing. Aside from employment issues, many people aged 24 to 35 have credit scores hurt by student loan defaults which have impacted their credit scores. The Federal Reserve Bank of New York reports default rates have nearly doubled from just over six percent in 2003 to almost 12 percent last year. The good news, however, is nearly 25% of people under the age of 35 have no outstanding debt.
There are some glimmers of hope in our economic future. Growth in the Gross Domestic Product was slower in the first quarter, but with no signs of another recession on the horizon, Mr. Yun estimates GDP might grow by 3% in the second quarter. Employment is improving with the recent news that the United States economy has replaced all of the jobs lost since 2008. Job growth is expected to rise 1.6 percent in 2014 and 1.9 percent in 2015, which should cause consumer confidence to rise as well.
Eric Belsky, managing director of the Joint Center for Housing Studies at Harvard University, agrees. “Growth in the stock market and the recovery in housing, along with pent-up demand, are major factors driving the economy.”
Take advantage of this new era of prosperity by making your next big move. With interest rates and house prices rising, now may be the perfect time to take advantage of the current favorable conditions. LWReedy.com is the perfect place to get started, or call one of our experienced real estate agents. No one knows real estate in Elmhurst and the western suburbs like LW Reedy.