There has been tremendous volatility in certain markets over the last few weeks (for example, the stock and currency markets). When this happens, some tend to lump all of their investments together and create an almost ‘Armageddon’ scenario where everything loses value quickly and dramatically. Real estate is an investment that can get caught up in this hysteria. Does the concern about the current housing market have merit?
Financial advisors have been warning us for months that the stock market was ripe for a “correction.”
Experts have been questioning the value of alternative currencies for over a year.
In contrast, here are the opinions of three major players in the residential housing market:
“It’s premature to worry about a housing bubble. The typical warning signs – excessive debt levels, poor quality loans, exponentially increasing home prices, rising vacancy rates and/or poor affordability compared to the past, and a high number of internet searches on house flipping – are not present.”
“My thoughts on many recent discussions of ‘housing bubble’ – the bar for a housing bubble is higher than just prices being above some fundamental value. There must be widespread behavior change as well such as higher levels of fraud and speculation.”
“US home prices are on track for a 5% nominal gain for the 4th consecutive year, returning national prices to their highest level since 2007. The growth has been driven by historically low mortgage rates and unemployment plus solid population and personal income growth rates…a meaningful correction should only be triggered by an unexpected economic shock.”
Speculation has driven certain markets over the last year. However, it has not been speculation, but instead people’s desire for homeownership, that has driven the real estate market.
According to the National Association of REALTORS most recent Profile of Home Buyers & Sellers, married couples once again dominated the first-time homebuyer statistics in 2017 at 57% of all buyers. It is no surprise that having two incomes to save for down payments and contribute to monthly housing costs makes buying a home more attainable.
But, many couples are also deciding to buy a home before spending what would be a down payment on a wedding, as unmarried couples made up 16% of all first-time buyers last year.
If you’re single, don’t fret! Single women made up 18% of first-time buyers in 2017, while single men accounted for 7% of buyers. A recent report pointed to a sense of responsibility and commitment that drives many single women to want to own their own homes rather than rent someone else’s.
Here is the breakdown of all first-time homebuyers in 2017 by percentage of all buyers, income, and age:
You may not be that much different than those who have already purchased their first homes. Meet with a local real estate professional today who can help determine if your dream home is already within your grasp.
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