5 reasons why the real estate market will continue trending upwards

When the COVID-19 pandemic began last year, it threw our world into upheaval. If asked a year ago, I would not have predicted that real estate values would experience record growth. Will this growth continue, or will it cool off? Here are five reasons values are likely to continue trending upward, at least for the rest of 2021.

1. Millennials

According to the National Association of REALTORS (NAR), millennials made up the largest share of home buyers at 38% in 2020. Millennials are growing up and their priorities are changing. Their incomes are growing and the idea of settling down and purchasing a home takes hold. This is not likely to change. Millennials surpassed the baby boomers as the largest living generation. As such they will continue to drive the growth in the real estate market.

2. Interest Rates

In its Federal Open Market Committee (FOMC) meeting held January of this year, the Federal Reserve kept the fed funds target rate set at zero to 0.25%. In addition, the Fed reinforced their message. They will continue to provide support to the economy until recovery is complete. With unemployment at 6.7%, considerably higher than the pre-pandemic unemployment rate of 3.5%, that recovery may take a while. A low interest rate environment will continue to drive growth in the real estate market.

 

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