Benzinga and Yahoo Finance LLC may receive commissions or fees on certain items through the links below.
America’s housing market is hurting and real estate observers of all stripes have different opinions on why. However, there is universal agreement on one major stumbling block: lack of resources. Would-be homeowners hoping to alleviate this problem recently received a gut punch with the release of a survey showing that half of American homeowners age 56 and older plan to age in place.
Don’t miss:
This study, conducted by Clever Real Estate, could dramatically change the way America buys a home. Over the past several years, the American housing market has moved to a predictable rhythm. Young homeowners buy first homes and then move to larger homes as their families grow before downsizing as adults and selling their homes. This cycle and new construction created enough homes for the market to move.
There is no way to build a new home that can make up for the lack of productivity when half of homeowners over the age of 56 are there. The cost of buying and developing land for new subdivisions has risen dramatically in recent decades. In addition, many cities and suburbs have adopted an anti-density, antidevelopment mindset that makes new construction a bigger problem than before.
See also: Deloitte is the fastest growing software company to join Amazon, Walmart & Target – Last chance to get 4,000 of its pre-IPO shares for only $0.26/share!
That squeezed inventory and drove home prices on a sharp upward curve over the past 15 years. The only reason consumers didn’t have many complaints at the beginning of this price-high was because the Federal Reserve had kept interest rates low to stabilize the economy after the severe financial crisis and COVID.
Once the Fed started raising interest rates up to 20 years, potential home buyers found their purchasing power significantly reduced. That was especially true for younger buyers, who competed with older, more well-heeled buyers in the housing market. Unfortunately for young buyers, a recent survey by the National Association of Realtors (NAR) revealed that the average age of the American home buyer has risen to 56.
The future implications for housing affordability are scary to think about. The housing crisis may increase when the average home buyer is 56 and a half and never moves. This was not the 1950s and 60s when new developments were springing up outside America’s big cities almost faster than people could fit into them. The large-scale, sustainable home building may never happen again in America.
Trending: The Ascent Income Fund from EquityMultiple focuses on stable income from high quality commercial real estate debt positions and has a historical distribution yield of 12.1% backed by real assets. Get a 1% return boost on your first EquityMultiple investment when you sign up here (approved sellers only).
So, where does that leave young home buyers or anyone looking for affordable housing? They have no choice but to adapt to the new reality. If supply shortages raise prices above average wages, consumers must move to less expensive markets and create additional income streams or both. Although creating a paying side hustle is possible, there may be another effective way to trap this cat.
If you move your home buying age from your 30s to your 50s, you won’t have to work the full 30 years required to pay off the loan. Creating income streams in your 20s and 30s can prepare you for retirement and independent home ownership. The sooner you start building a diversified portfolio of dividend and growth stocks, the more likely you will become accustomed to the “new” normal.
Are you wondering if your money can take you to a $5,000,000 nest egg? Talk to a financial advisor today. SmartAsset’s free app matches you with up to three financial advisors serving your area, and you can interview your advisor matches for free. decide which one is best for you.
A 9% Return In Just 3 Months
EquityMultiple’s ‘Alpine Note – Basecamp Series’ he is turning heads as he opens his wallet. This short-term investment note offers investors a 9% rate of return (APY) for just three months and $500,000. The Basecamp rate is at the highest spread for t-bills. This healthy rate of return does not last long. With the Fed poised to cut interest rates in the near future, now may be the time to lock in a good rate of return with flexible, liquid investment options.
Also, Alpine Note – Basecamp can be rolled into other Alpine Note bond returns, or into one of EquityMultiple’s heavily vetted real estate investments, which also carry a minimum investment of just $5. Basecamp is open only to new investors on the EquityMultiple platform.
Looking for fractional real estate investment opportunities? The Benzinga Real Estate Screener shows the latest offers.
The article Gut Punch For The Housing Market-Survey Reveals Half Of Homeowners Over 56 Plan To Age In Place And Never Sell appeared first on Benzinga.com
