Best of the Week
Most Popular
1. Investing in a Bubble Mania Stock Market Trending Towards Financial Crisis 2.0 CRASH! - 9th Sep 21
2.Tech Stocks Bubble Valuations 2000 vs 2021 - 25th Sep 21
3.Stock Market FOMO Going into Crash Season - 8th Oct 21
4.Stock Market FOMO Hits September Brick Wall - Evergrande China's Lehman's Moment - 22nd Sep 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
7.AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
8.Why Silver Price Could Crash by 20%! - 5th Oct 21
9.Powell: Inflation Might Not Be Transitory, After All - 3rd Oct 21
10.Global Stock Markets Topped 60 Days Before the US Stocks Peaked - 23rd Sep 21
Last 7 days
Bitcoin Price TRIGGER for Accumulating Into Alt Coins for 2022 Price Explosion - 30th Nov 21
Omicron Covid Wave 4 Impact on Financial Markets - 30th Nov 21
Can You Hear It? That’s the Crowd Booing Gold’s Downturn - 30th Nov 21
Economic and Market Impacts of Omicron Strain Covid 4th Wave - 30th Nov 21
Stock Market Historical Trends Suggest A Strengthening Bullish Trend In December - 30th Nov 21
Crypto Market Analysis: What Trading Will Look Like in 2022 for Novice and Veteran Traders? - 30th Nov 21
Best Stocks for Investing to Profit form the Metaverse and Get Rich - 29th Nov 21
Should You Invest In Real Estate In 2021? - 29th Nov 21
Silver Long-term Trend Analysis - 28th Nov 21
Silver Mining Stocks Fundamentals - 28th Nov 21
Crude Oil Didn’t Like Thanksgiving Turkey This Year - 28th Nov 21
Sheffield First Snow Winter 2021 - Snowballs and Snowmen Fun - 28th Nov 21
Stock Market Investing LESSON - Buying Value - 27th Nov 21
Corsair MP600 NVME M.2 SSD 66% Performance Loss After 6 Months of Use - Benchmark Tests - 27th Nov 21
Stock Maket Trading Lesson - How to REALLY Trade Markets - 26th Nov 21
SILVER Price Trend Analysis - 26th Nov 21
Federal Reserve Asks Americans to Eat Soy “Meat” for Thanksgiving - 26th Nov 21
Is the S&P 500 Topping or Just Consolidating? - 26th Nov 21
Is a Bigger Drop in Gold Price Just Around the Corner? - 26th Nov 21
Financial Stocks ETF Sector XLF Pullback Sets Up A New $43.60 Upside Target - 26th Nov 21
A Couple of Things to Think About Before Buying Shares - 25th Nov 21
UK Best Fixed Rate Tariff Deal is to NOT FIX Gas and Electric Energy Tariffs During Winter 2021-22 - 25th Nov 21
Stock Market Begins it's Year End Seasonal Santa Rally - 24th Nov 21
How Silver Can Conquer $50+ in 2022 - 24th Nov 21
Stock Market Betting on Hawkish Fed - 24th Nov 21
Stock Market Elliott Wave Trend Forecast - 24th Nov 21
Your once-a-year All-Access Financial Markets Analysis Pass - 24th Nov 21
Did Zillow’s $300 million flop prove me wrong? - 24th Nov 21
Now Malaysian Drivers Renew Their Kurnia Car Insurance Online With Fincrew.my - 24th Nov 21
Gold / Silver Ratio - 23rd Nov 21
Stock Market Sentiment Speaks: Can We Get To 5500SPX In 2022? But 4440SPX Comes First - 23rd Nov 21
A Month-to-month breakdown of how Much Money Individuals are Spending on Stocks - 23rd Nov 21
S&P 500: Rallying Tech Stocks vs. Plummeting Oil Stocks - 23rd Nov 21
Like the Latest Bond Flick, the US Dollar Has No Time to Die - 23rd Nov 21
Why BITCOIN NEW ALL TIME HIGH Changes EVERYTHING! - 22nd Nov 21
Cannabis ETF MJ Basing & Volatility Patterns - 22nd Nov 21
The Most Important Lesson Learned from this COVID Pandemic - 22nd Nov 21
Dow Stock Market Trend Analysis - 22nd Nov 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Is Now a Good Time to Invest in the US Housing Market?

Housing-Market / US Housing Mar 23, 2017 - 06:49 PM GMT

By: Nicholas_Kitonyi

Housing-Market The US housing market has maintained its subdued growth following Trump’s election to The White House. Towards the end of last year, especially in the run-in to the US presidential elections, there was what appeared to be a strong belief that Trump would be bad for the stock market if elected as president, and by extension the overall economy of the US.

However, the US stock market has experienced one of the best runs in history repeatedly breaking the all-time highs from one week to the next. The housing market, on the other hand, has experienced a rather slower growth since Trump’s election, but the point is that it’s been growing, nonetheless.


This has been characterized by a rise in the US House Price Index, as demonstrated on the following chart by Freddie Mac.

Based on the Freddie Mac House Price Index curve above, the US housing prices have just gotten past the highs of the pre-2008 period by nearly two percentage points. This also puts it more than 38% above the levels reached during the 2008 global financial crises, which brought the world markets to their knees.

Now, given the current circumstances in the US housing market, many are wondering whether it could be the best time to invest in the industry. On the other hand, there are also those who are thinking of cashing out on their property investments with housing prices already appearing to have peaked in the last couple of years.

For those looking to profit off their investments, then that would mean selling. However, based on recent data, selling property in the US has not been particularly easy. Research shows that old houses are now taking longer to sell than before with the owners probably being forced to sell at a discounted price. In addition, some people looking to sell their properties do not understand well the contents of a listing contract agreement, and this has led to some having to re-list their houses.

Nonetheless, the real estate market is composed of different players including agencies that offer to buy houses from individual sellers right away without having to wait for a buyer. As such, it would appear that probably the fastest way to sell your house in the US right now would be via these buy and hold agents, rather than a listing real estate agency.

The growth of the US housing market appears to be settling down to moderate levels and the house price index is also mirroring the same trajectory. The annual change in Freddie Mac house price index currently stands at 6.5%, which is a slight increase from 5% recorded in 2015. In late 2013, the Freddie Mac House price index was registering a change of more than 10% after experiencing a sustained growth for a period of over two years.

Given the indicative stability in the US house price index over the last two years, it is now easier to plan on buying a house than it was a couple of years ago. As such, buying a house in the US is probably now easier than selling one. Mortgage rates remain low at just over 4.4% despite the recent interest rate hike and the lending market continues to attract more players.

The US housing market is one of the country’s main economic indicators. A continuous growth shows that the economy is still growing and this is one of the reasons why the Federal Reserve was able to increase interest rates in March. More rate hikes are planned before the year end, but again, this will depend the kind of signals the market sends with regard to investor sentiment on more rate hikes.

While this uncertainty continues to hover around the US housing market, the decision on whether to buy or sell a house as an investment will rest on the predictability of the House price index, the mortgage rates, and the trend in the small loan market.

Conclusion

In summary, the US housing market is not only an economic symbol for the country, but also a global economic indicator. The US attracts investors from all over the world, with several of them investing in the real estate market.

Currently, Canada, Asia, Europe and Latin America are the leading foreign investors in the US real estate market. A decline in investments these foreigners could be a signal that the global real estate market is slowing.

As for now, it looks like it’s a good time to invest in the US housing market. There are growth opportunities in various suburbs and metro areas while urban and high-end markets continue to experience a higher price index.

By Nicholas Kitonyi

Copyright © 2017 Nicholas Kitonyi - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in