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With the pandemic still hovering above our heads, the U.S. real estate market has still not recovered, and the aftereffects are far from over. However, as the experts forecast future behavior, investors have a better shot at understanding how the market is likely to behave. Below we discuss future real estate trends to help you navigate the next five years.


1.   People Flock Towards The Suburbs


One thing that this pandemic has taught us is the need for personal space. As a classic aftereffect of COVID, people are leaning towards suburban housing. Combined with the trend of remote working, more and more people will be on the move towards suburbs.

Those who lost their jobs and are unable to afford the expensive housing are relocating out of necessity, while the wealthy are moving out by choice.

Millennials, growing older and starting their families, need a bigger, child-friendly space.

According to a research report by the National Association of Realtors (NAR), first-time buyers make up 31% of home buyers. The number is expected to grow further as Gen-Z is turning thirty soon.


2.   Home Prices Continue to Climb


The inflation has not spared the Real Estate market in the country. Things will likely worsen with the wage increase not matching the current inflation rate. According to a report by Zillow, a typical monthly mortgage payment is 75% more expensive today than in 2019.

However, reports suggest that prices will increase at a slower rate than before. As more buyers develop a wait-and-see attitude, seller expectations might alter, causing a moderate price increase.


3.   Possible Shortages


The imbalance between house supply and demand is a primary reason why prices are going up. The short supply of houses in the US can’t keep up with the growing demand, creating a shortage.

According to NAR, the shortage existed even before the pandemic in 2020. After an extensive shortage, homebuilders will take time to meet the demand.

This is good news for sellers as they will have less competition. Buyers, on the other hand, are likely to suffer.

Low supply means that every good house gets sold quickly, creating more competition.


4.   The Rise of Remote Working


While the concept of remote working was already there, COVID accelerated the trend until it became a necessity. Businesses that were unable to adapt and innovate were forced to shut down. It turns out that working remotely actually helps in cutting costs and time.

The concept of virtual business and working without an office is gaining popularity among US citizens, with more businesses being developed based on the model. According to Upwork, 22% of the American workforce will be employed remotely by 2025.

This, however, means lower demand for commercial real estate. Not having to go to an office daily, people are saving their living costs and shifting to cheaper areas, away from big cities.


5.   Digitalization of House Hunting


Millennials, infamous for their reliance on technology, are moving towards digitalized real estate market. Newly developed interactive software enables users to virtually tour a property, bid on it, and even buy it.

With the use of tech tools, buyers can see:

  • 3D Tours
  • Drone videos, and
  • Virtual staging of the property

Websites like Zillow provide users free consultation services, advanced filter searches, and custom email updates. Mortgage rates, calculators, and updates are also available.


6.   Mortgage Default Might Decrease


With the stricter lending standards in the US, the possibility of people falling behind on their mortgage payments is likely to decrease. Borrowers have to submit more documents and attain higher credit approval criteria.

Lenders and Regulators now double-check an applicant’s ability to repay the loan, making it less likely for the borrowers to default.


Final Word


Viewing the previous trends and the position of the market today, it is unlikely for the US Real Estate market to crash in the near future. Growing interest rates are dampening the market, but prices are still rising at a slower pace.

Yet, due to a lack of supply, it will continue to be a sellers’ market. If you understand when and where to look, there are still solid opportunities for buying/ selling.






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