After making a significant turnaround last year from the days of the recession, many economists expected growth in the U.S. housing market to slow down in 2014. However, after a long winter where harsh weather conditions stifled home sales across the country, pent-up demand coupled with general improvement in the economy has helped the housing market continue to leap forward. Economists are now saying that, while headwinds like tight credit and building lot shortage may lie ahead, the U.S. housing sector is expected to keep moving on this upward trajectory through the rest of 2014 and into next year.
The National Association of Home Builders (NAHB) anticipates payroll employment to continue growing as unemployment drops by another 0.5 percent by the end of 2015. More Americans working means more money to allocate toward home-buying, which helps spring the market to life. As David Crowe, NAHB's chief economist, succinctly puts it, "Housing needs an improved economy."
Luckily, we're part of the way there already. Maury Harris, managing director and chief U.S. economist for the financial services company UBS, said that banks are currently sitting on over $2 trillion in cash — money that they want to inject back into the economy. The better the country's economic outlook is, the stronger the housing market becomes.
"As unemployment comes down and credit availability eases, Millennials (the 25-34 age group) will feel better about their economic circumstances," Harris said in an official statement. "I think we will see the shared household rate come down, less doubling up and a pickup in household formations."
Are you looking to take advantage of this improving market? Be sure to call Jon Hesse, one of Sacramento's top real estate agents, for available and affordable properties in the Golden State's capital.