Taking Advantage of Low Mortgage

Variety of designer stores on Rodeo Drive, Beverly Hills, California

The economic decline of 2018 has increased real estate investment in the US during the pre-pandemic period. The industry received $470.7 billion, registering a 19% uptick in capitalization. Domestic institutions’ decision to boost their net holdings is seen to contribute to this development. Increased domestic activity is cited as the primary reason for the improved investment flow to the sector, which effectively turned around two consecutive years of decline. Additionally, new tech such as real estate management platforms has been boosting property owners’ management capabilities.

This has been the story before the pandemic. In fact, global institutional-grade real estate has been projected to expand by 55% from 29 trillion in 2012 to about $45.3 trillion in 2020. It has also been projected that institutional-grade real estate will be worth $25 trillion in developed countries and $20.3 trillion for developing countries.

This same story is likely to continue after the pandemic, especially in the US housing market. Also, COVID-19 seemed to have been a huge factor. This is because mortgages decreased because of the outbreak (MarketWatch, 2020).

In the US, many new homeowners during the pandemic claimed that COVID-19 played a role in pushing them to purchase homes (LendEDU, 2020). About 54% took advantage of the low mortgage rates. Another 15% stated that they wanted to move out of locations getting hit badly by the outbreak. Only 26% answered that the outbreak did not have an impact on them becoming a homeowner.

The long-term trend of increased investments looks to have been accelerated by pressing circumstances. And investors are keen. In fact, almost 15% of housing stock in the US is made up of multifamily housing, which is popular as it can generate a steady cash flow (Infutor, 2021). Single-family dwelling units, on the other hand, make up about 81.5%. The market, despite being a little slower, is still picking up.

But not all are enthusiastic. About 30% of new homeowners during the pandemic regret their home purchase for financial reasons. Another 10% stated that they should have waited because of social/life reasons. And 7% claimed that they were not prepared for ownership. However, 43% of new homeowners during the pandemic did not regret their decision. 

Posted by Land & on
Email Send a link to post via Email

Leave A Comment

e.g. yourwebsitename.com
Please note that your email address is kept private upon posting.