Boom or bust
The rest of the year is projected to be a busy time for homebuyers and sellers. In December 2015, Trulia that looked at the overall health of the real estate market. They found that for a large portion of future homebuyers, the typical American Dream is making a comeback.
For many, the American Dream encompasses purchasing a home and raising a family in it. Even though many individuals and families feel that possibility is making a comeback, there is also hesitance over whether they'd be able to afford it. Unfortunately, there are still many lingering effects from the housing market crash of 2007, and the subsequent recession.
More predictionsTrulia found that 75 percent of Americans wish to eventually own a home. An even higher 80 percent of millennials plan to eventually transition into a homebuyer in their lifetime. This number represents a high mark since 2010. But a modest 22 percent think obtaining a mortgage will be more difficult in 2016 than it was last year.
Part of this reason is due to lenders having to meet strict regulations that were enacted in the wake of the crash. In the years before the housing market bubble burst, lenders were relatively careless when handing out mortgages. Very few were conducting financial background checks, and as a result, mortgages were handed out to individuals who could not afford them.
As highlighted in the book and film adaptation, "The Big Short," it was not uncommon for someone to own multiple mini-mansions in the early part of the 2000s. In the years since, banks and other financial institutions are much more careful and stringent when handing out mortgages.
When the housing market is healthy, everyone benefits, including sellers. Approximately 30 percent of Americans believe 2016 will be better for selling homes than 2015 was. This in turn leads to better optimism from buyers.
However, it has to be noted that positive sentiments are not always the same. Different real estate markets across the country are in different shape. For example, it is very difficult and expensive to find a home in San Francisco, but Trulia listed Grand Rapids, Michigan, as the top real estate market to watch out for in 2016, indicating that the market will be good for buyers and sellers.
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