A recovery is underway in the US residential real estate market, with The Demand Institute predicting property prices in the nation will rise by one per cent before 2012 draws to a close. This growth is expected to continue over the coming years, with annual increases of between three and four per cent anticipated between 2015 and 2017. However, the organisation stressed the upturn will "not be uniform", with some markets performing better than others as the US gains ground following the economic crisis.
Chief research officer at the institute Louise Keely commented: "In these initial years, the prime driver of recovery won't be new home construction, but rather demand for rental properties." According to the new report - The Shifting Nature of US Housing Demand - published by The Demand Institute, there has been a significant rise in the number of people prepared to rent a home. Of those surveyed who are intending to move house in the next two years, more than half stated they will rent rather than buy. This demand presents opportunities for real estate investors, especially if they are in a position to purchase foreclosed properties at discounted rates, which can then be rented.
Earlier this month, Federal Reserve board governor Elizabeth Duke explained the key to a housing market recovery in the US will be balancing the availability of finance with responsible lending practices. She was speaking at a forum organised by the National Association of Realtors and stressed there will be "tough decisions" ahead for the winner of the forthcoming US presidential elections. Ms Duke acknowledged there will be disagreements over which route to take, but she added: "Nevertheless, until these tough decisions are made, uncertainties will continue to hinder access to credit, the evolution of the mortgage finance system and the ultimate recovery in the housing market."
- Friday 18 May 2012