All the latest data indicates that the United States is very likely to experience another housing boom in the near future. Fortunately, some analysts think this will not be a boom in prices as was witnessed a decade ago. The next boom is most likely going to be a beneficial uptick in homebuilding, which would invigorate the economy, stimulate the construction industry, and lead to other positive effects.
According to data from the National Association of Realtors, existing home sales rose more than expected in November, increasing by 0.7% at a seasonally adjusted annual rate of 5.61 million. Sales increased 18.2% before seasonal adjustment from November 2015, when changes in existing mortgage regulations delayed closings. It’s now clear that the sales of extant housing are back up to pre-real estate crash levels, which in turn is putting pressure on prices.
While mortgage rates have been clearly on the rise post-election, we’re also seeing decent rises in wages and employment is robust. There’s been a noticeable increase in consumer and business optimism, reflecting expectations that President-Elect Donald Trump will relax burdensome regulations.
On the other hand, mortgage rates at more than two-year highs could make it challenging for some borrowers to qualify for home loans, while limited inventory, partly due to a shortage of skilled labor and available lots in the new-home market, could keep property prices elevated.
However, other analysts are expecting the surge in housing demand to boost housing supply, which in turn would keep prices from hitting unsustainable levels.
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