Seniors find themselves wanting to move for a variety of reasons, they may decide to move because they need to downsize if their current home requires too much maintenance, they may have health
Real Estate Is Poised to Help the U.S. Economy Recover
Dated: April 23 2020
That means those that already own a home before the recovery (and might sell after economy bounces back) will see their investment pay off in building additional family wealth. Real Estate as an investment is expected to have positive gains which will balance some of the losses in the economy that begin to be hit even harder. Most average Americans keep their biggest investment in their home and calculate their net worth based on how much equity is in their home. Buying during these rocky times is only outweighed by the rate that you might be able to lock-in. While you can still get a good rate, you better lock it in (they don't always call it 'historically low'). Consider that in 2000, the averages for a 30-year fixed mortgage was around 8%; double of what it is now. Meaning right now, it is half the expense to own a home and lock it in for 30 years before it goes up. Sure, some sellers might begin to get scared and drop prices for a period, but the affordability of loans almost outweighs the price of the home. No matter the price of the home, if the rate climbs too high you won't be buying either. If the government can keep liquidity flowing and mortgage rates low so new purchases continue to be affordable then deflation won't happen. Homeowners will continue to grow financially along with the equity and more availability of that equity. It will begin to liquify as homes sell/upgrade/move or Americans take out their equity by other means during the bounce back. The ones that wait to buy, will be paying those that didn't ... and might even cost them at a higher interest rate to do so.
One of the reasons the real estate market wasn't poised to help during the last recessions was because Americans were too leveraged with adjustable rate mortgages; rates that fluctuated when bond costs went up and yields went down (like what happens during hard times & recessions). Now that those practices were stopped for more than a decade and more Americans are fixed in locked mortgage rates, their home costs won't swing wildly or be an issue.
However, adjustable rate credit (like your standard credit cards) are a whole different issue. That's what experts have been saying will be the problem in our next recession for more than a decade. The swing can take liquidity out of the market because obligation to current debt (at adjustable rates) will put a strain on available cash. Banks increase these rates when risks in the market gets higher and they charge more when availability of cash/credit gets tighter/harder. Like any commodity, the price goes up when supply is low and still has a demand. When more people must pay higher rates on their current debt, they will have less of their monthly budget to spend elsewhere or in the U.S. economy. That's why the steady home market will be able to give Americans some stabilization and help instead of hurt this time around.
I am a full-time professional marketing homes & making dreams come true for new home buyers. I work, live, and play in the Phoenix Valley and specialize in selling in the boundaries and outskirts of t....
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If you’re a prospective buyer or seller, it’s important to understand the current real estate market conditions and how they affect you. The Counselors of Real Estate (CRE);
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