When it comes to growing your money, buying a house is still one of the best ways to do it. The evergreen appeal of real estate for wealth building is evident from the latest reports shared by big names in housing, like Black Knight and CoreLogic, along with the National Association of REALTORS® (NAR). Their reports show that even with ups and downs, the housing market is a solid place for your investment. Learn why homes are such an excellent choice for making more money.
Home Prices on the Rise
Did you hear that house prices are going up? That’s right. Black Knight and CoreLogic reports show that house values are climbing. Black Knight says prices went up a little bit in the last part of the year, and CoreLogic also saw prices jump up over the whole year.
Even better, CoreLogic thinks prices will keep increasing, even if they’re cautious about it. They guessed prices would go up 3% last year, but they actually went up by 5.5%. They thought prices would drop a few years back, but instead, they soared. This means if you’re looking to buy a house or already own one, things look good for making money.
Understanding Home Inventory Levels
Have you tried to buy a house recently? You might have noticed there aren’t that many out there. The NAR said there were about 1 million homes for sale at the end of last year, which was less than before. But here’s the catch: many of those houses are already being bought by someone else, so they’re not available to purchase.
This means there are way fewer homes for sale than it seems. Why? Because people who got a good deal on their mortgage rates are keeping their homes. Plus, more people want to buy houses, especially if interest rates for loans get lower. This makes it harder to find a home, but it also means if you own a home, its value might go up because so many people want to buy.
Employment Trends and Housing
Now, let’s talk about jobs. The number of people asking for unemployment benefits (that’s money you get if you lose your job) decreased recently. This sounds like good news, right? This means that not many people will lose their jobs. But there’s a bit of a worry because the average number of these claims over four weeks is increasing. And with some big companies laying off workers, we might see more people needing unemployment benefits soon.
What does this mean for houses? Well, if more people have jobs, they’re more likely to buy houses. But if more people start losing their jobs, they might not want to or be able to buy homes. So, the job market can affect the housing market.
The Big Picture
So what have we learned? House prices are increasing, which is great if you own a house or are considering buying one. But there aren’t that many houses for sale, making it tough to find one. Plus, how the job market is doing can impact whether people can buy houses.
All this means that real estate, or buying homes, remains a strong way to grow your wealth. It’s not without its challenges, like finding a house to buy in the first place. But the potential for making money, especially with rising prices, makes it a path worth considering for anyone looking to invest.
Looking Ahead
As we peek into the future, there are some big reports and data coming up that could shake things up in the housing market and beyond. Keeping an eye on these will help us understand where things might be heading next.
First off, get ready for some news on inflation. It’s like a thermometer for the economy, showing how hot or cold things are. We’ve got the Consumer Price Index (CPI) coming up, which tells us how prices for everyday stuff are changing. Then there’s the Producer Price Index (PPI), which is all about the cost of goods before they get to us, the consumers. These reports are big deals because they can influence what the folks in charge of interest rates decide to do next.
Next, we’re looking at how confident builders are in the housing market, with the National Association of Home Builders releasing their confidence index. This gives us a sneak peek into how many new houses might built soon. We’ll also see the latest on housing starts and building permits, which tell us how many new homes are beginning to be built and how many have been given the green light. This info is super important because more houses being built can help ease the crunch of not enough homes for sale.
Then, there’s the latest on jobless claims, manufacturing data, and retail sales. These bits of information give us a broader picture of how the economy is doing. If fewer people are losing their jobs, factories are busy, and folks are out shopping, it’s usually a good sign for the housing market.
Technical Picture
Now, explore the nitty-gritty of mortgage bonds and interest rates. Think of this as the heartbeat of the housing market. Mortgage bonds are a big deal because they influence the interest rates you pay on a home loan. Lately, they’ve been hanging out in a certain range, like saying they’re in their comfort zone. But we’re all watching closely because any big moves could mean changes in how much it costs to borrow money for a house.
The 10-year treasury note, a good friend of mortgage rates, is also in a tight spot. It’s been bouncing between a low and high point, like a ball in a game of catch. Where it goes next could tell us a lot about where mortgage rates will head, making it easier or harder for people to buy homes depending on the direction.
Building Wealth Through Real Estate
Wrapping this all up, we’ve seen that real estate remains a solid choice for anyone looking to grow their wealth. With house prices on the rise and the market buzzing with activity, there are plenty of opportunities out there. Sure, finding a home to buy might be a bit of a challenge with fewer houses up for grabs, but the potential for your investment to grow is still strong.
Looking ahead, we’re keeping our eyes on several key reports and data points that could shape the market in the near future. From inflation numbers to the number of new homes being built, these indicators will help guide decisions for buyers, sellers, and investors alike.
And let’s not forget about the technical side of mortgage bonds and interest rates. These play a huge role in the affordability of homes and could be the deciding factor for many when entering the market.
If you’re thinking about getting into real estate or are already knee-deep in the housing market, staying informed and watching these developments is key. The evergreen appeal of real estate for wealth building makes it an avenue worth exploring for anyone looking to invest in their future. Jeff Brother, a professional mortgage advisor, offers unique mortgage solutions that can help you achieve your real estate investment goals.