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5 Trends Influencing The Housing Market Right Now


The housing market has been a hot topic in the news lately. The lack of affordable homes, low inventory, and high prices are all contributing factors to this discussion. Homebuyers have been struggling with a tough market for some time now, so it's worth taking a look at what is influencing today's trends. This post will cover five major trends that are shaping the housing market right now.

1. Low Inventory

Inventories have dropped significantly over the last few years and there just aren't enough homes on the market to meet demand from buyers looking to purchase their first home or trade up into an even bigger house because of family growth or change in lifestyle requirements (i.e., downsizing). There were 2 million new households created in the last decade, which is a lot of people coming to market looking for homes that aren't there.

2. Limited Building

The lack of inventory has also pushed prices up as builders have been sitting on their hands due to uncertainty in what type and size of home will be most profitable in today's climate. With limited investment opportunities, it doesn’t make sense at this point for them to spend time or money building something new when they are already generating revenue with higher priced existing homes. But since housing starts reached a 20-year low back in September 2017, supply isn’t going up and demand continues to outstrip current levels available from developers so the price tag just keeps getting bigger!

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3. Interest Rates

Interest rates are at the lowest they've been in years. This is great for people who are looking to buy because mortgage rates are getting more and more affordable, but it's not so good for those on a fixed income like retirees or homeowners that can't afford their current monthly payments with this increased affordability. If interest rates continue to climb, we could be hearing about an increase in foreclosures as these folks struggle to keep up with higher payments.

4. Geopolitics

In addition to low inventory and high prices, geopolitical factors have also played a role too whether it’s trade wars driving up input costs (e.g., steel) or tariffs making supplies of lumber from Canada difficult at best…homebuilders need access to resources if they want any chance of building new inventory and the industry is already suffering from a lack of skilled labor.

5. Stress Tests 

The stress tests that have been implemented by federal regulators are now playing into today's market too. It’s difficult to build anything when you can't get financing, which has led to some builders scaling back their planned projects while they wait for these rules to be modified or overturned altogether. This uncertainty doesn't help buyers either because it makes them hesitant as well so both parties feel like there isn’t much progress happening on any fronts!

Housing is a major investment for most of us. When you’re looking to buy or sell, it can be hard to know what the trends are and how they might affect your situation. With that in mind, we wanted to share with you some information on 5 key factors that will influence the housing market this year. If there's anything else you want to learn about, please visit our website where we have more resources available including interactive maps so you can see home prices around the world and even explore neighborhoods nearby!


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