The Current Situation of the Housing Market in the USA- Are There More Buyers or Renters?
The USA is a big country with more than 382 million people and millions of houses. The trends change every month. But what’s the trend of the housing market in 2021? Real Estate Agent Brooklyn will explain this today.
What’s Going on In the Real Estate Market?
The pandemic has influenced everything. Millions of people lost their lives and jobs. The prices became high for all commodities. Currently, the economic conditions are weak, and unemployment rates are high. The construction of houses has stopped due to the unstable financial situation. This scenario has increased the prices of houses. Since the prices of homes are high, are people buying new houses? If they are not, do they prefer to rent houses and save money? Who is more in numbers in the housing market of the USA, Buyers or renters? Should you go for investing in the real estate market or not? If the same question has popped up in your mind, too, keep reading!
The Renters In USA
The USA has a huge population. Every year, hundreds of people move into the country. It is evident for first-time movers to rent a space. A total of 42 million houses is currently rented in the country. It shows that renting a home or an apartment in the USA is easy. But is the case still the same after covid-19? Let Real Estate Agent Brooklyn explain!
People rent spaces when they have low income or when the housing supply becomes slow. Due to the pandemic, the market is facing both conditions. Home prices are now more increased as compared to last year. The builders have stopped the construction of homes. Therefore, the average time of bidding on homes is lower than before. It was 38 days in 2020, but now it has shortened to 22 days. What does all this mean? What is the result of high prices and reduced market days of homes? It is indicating that the housing market right now is a seller’s market. Therefore, it would be better to rent a house rather than buying one. That is why the USA market has more renters than buyers right now.
Another reason for more people renting is financial instability. People need a security deposit with the monthly rent in their hands for renting. Unlike buying, which requires a considerable amount of money with lots of paperwork. Getting a mortgage loan for buying a house has its complications. A stable job, healthy salary, and good credit score are necessary. While renting requires none of that. Therefore, after the destruction of covid-19, people prefer to rent houses over buying. The reasons for this are low income and more minor complications.
The Buyers In USA
When the rental prices are high, it is sensible to buy a house. Rent rates were increased in the USA, but the case is not the same anymore. Real Estate Agent Brooklyn will tell you how. In the last year, rental prices dropped down by 1.4%. That is why people begin to rent more houses. It makes the housing market more inclined towards a renters market rather than buyers. Due to the pandemic, it is expected that this trend will continue.
The interest rates have become low from last year. It is the chance for financially stable people to take advantage. In 2000, the mortgage rates were very high. It was 8% for 30 years. Currently, the rate of a 30-year fixed mortgage falls between 3%-5%. While for 15 years, the rate is 2.5%. Sounds impressive, right! The low-interest rates are attracting people to buy more houses. Even if they are not financially strong, they can take loans easily. Due to this, the housing market of the USA has started flooding with buyers.
Who Has Won the Housing Market Of 2021?
Who is the winner after this lengthy analysis by Real Estate Agent Brooklyn? Let’s jump to the results now!
When the lockdown was imposed, the rental rates dropped down. Individuals started renting smaller places. As people begin to rent one room or two rooms at low prices. It has increased the number of renters in the USA. But buying a home is more accessible and more beneficial with low-interest rates and low monthly payments. However, home prices are high in the real estate market. But buyers can buy homes at affordable prices in different areas. All they need to do is to do some research. For those who want to sell their houses, this is the right time to list homes. The buyers can pay more with an accessible facility of loans. Buying a house will benefit people in many ways after some months. They can resell the homes at higher prices in a stable economic condition. Or they can rent a portion and earn even in this pandemic.
Therefore, the result is in favor of buyers. Currently, renters are more in number, but this trend will not stay longer. The real estate market is in favor of buyers right now. The number of buyers in 2019 was 5.34 (millions in units). The number increased to 5.64 in 2020. People are moving towards getting loans and buying homes. According to the forecast, home buyers will reach 6.49 (million in units) in 2021. Hence, the housing market of the USA has more buyers than renters.