Home ownership is declining.
The United States does not rank particularly high among other high-income countries when it comes to homeownership. Interest rates, rents, and world economy all play a part.
The national median rent was $1,827 a month in April, up 16.7% from a year ago, according to a report from Realtor.com. Yikes!
According to Census.gov the U.S home ownership rate stands at 65.4%. According to Federal Reserve Economic Data, the median price of houses sold in 2022 is $428,700. Looking at the reasons behind differences in homeownership across countries can be difficult. Each country has its own culture, demographics, policies, housing finance systems, and, in some cases, a past history of political instability that favors homeownership (Butrica and Mudrazija 2017). However, the reasons behind the median house price is not complicated. You may ask why?
Real Estate is an Asset
When there are more buyers than sellers, the supply of houses goes down and the demand goes up, making houses harder to buy and more expensive. Real estate price increases are caused by a variety of factors including rising economic prosperity, low-interest rates, wider mortgage product offerings, and easy access to credit.
Real estate can yield high returns, and it’s useful for diversification and as a hedge against inflation, but many see it as a high-risk play, particularly in developing countries.
Wyoming Investor: Real Estate Prediction
Sharp home price declines are incredibly rare: Only the Great Depression and the Great Recession saw nationwide home prices fall in the double-digits range. As rising mortgage interest rates and a return to more normal conditions continue to even out real estate in the southern states will decline 10-12% , with the biggest declines of 15% occurring in California.
Rent will increase to cover property taxes. Home prices are still appreciating, just at a more reasonable rate that’s more in line with what we have seen historically. Homes are still selling close to list price, which is great news for buyers and healthy for our housing market.
Sellers will start to adjust their often inflated asking prices for their homes and this will increase the demand for property investment bargains.
Wyoming Investor Business Consulting
We can help you navigate and capitalize on the opportunities. Across multiple of client engagements around the world, our team has played a pivotal role in helping leaders in residential, commercial, and industrial real estate stay ahead amid relentless competition.
We work with property owners, REITs, service providers and a wide range of other players to maximize their value, shape their growth strategies, and become more innovative. Contact us to discuss partnering with us.