Before everyone starts talking about the next recession, let’s all take a second to celebrate and recognize everything that has happened over the last decade. The U.S. economy is booming! Just take a look at some of these key stats:
- Gross domestic product in the first quarter of 2019 outpaced the average for the past decade
- The economy added 21 million new jobs during 2010 to 2019, and pushed the unemployment rate to 3.7 percent
- The U.S. population has grown about 8 percent in the past decade, and America skews younger
- With over 60 percent of the population under the age of 50, demand for housing remains solid
So why are people scared over some dark clouds on the horizon? One of the reasons is that the Federal Reserve – the government system that determines monetary policy – reversed its commitment to tighten policy, and instead said it would be more patient.
This means that the Federal Reserve wasn’t fully confident in the recovery of the U.S. economy. Rather than raise interest rates, it decided to hold off and even stated they may lower rates if they felt they needed to. In turn, the markets saw this lack of confidence on the Fed’s end, and while welcoming the continuing low interest rates, became concerned about the economic outlook.
Although home sales have suffered this year in the wake of rising home prices and more economic uncertainty, there are several factors that provide a silver lining for housing. First, is that America is young and growing. That means housing is going to continue to be in demand, even more so than it is now, as younger generations continue to age and move out of their parents’ homes.
Despite the fact that the Baby Boom generation is moving toward retirement, there are over 60 million Gen Xers, 88 million Gen Y and 65 million Gen Z Americans who are either in or moving into their careers. Remember when everyone thought millennials would never buy homes or cars? Yeah, that was wrong!
So get ready housing, there is a wave of young and eager homebuyers about to hit the market in the coming years.
And while more and more young people get ready to purchase their first home, we expect to see exciting shifts in the marketplace as technology, design, and consumer preferences ripple through the country’s neighborhoods.
To learn more about housing trends and economic data, visit the realtor.com research portal.