Currently, commercial as well as residential real estate is what’s feeding the economy of the US. Consumers in search of real estate must be wary of the economy because there’s never a guarantee, just lots of odds and possibilities. When looking into buying houses, ranches, farms or any sort of property, the consumer needs to be educated on every aspect of the real estate market and the economy. The best way to go about it is to find the right real estate salesperson for you, who can guide you and inform about the market. Here is where the saying, “leave no stone unturned” is applied. You need to have all the cards on the table to make the best choice because again when it comes to real estate, it’s a gamble, there are no guarantees, just the best possible outcomes.
When we have fewer people buying houses and properties, the economy takes a direct hit, and so, we see a downward spiral into recession. The thing is, the condition of the stock market indexes has a direct effect on consumer’s confidence, and consumer’s confidence is what keeps the economy up the float. When major indexes increase, we see happy consumers willing to buy services and spend their income on real estate and other investments, therefore leading to them paying taxes for these services. And when there is a decrease in indexes, we see pessimistic consumers, unwilling to spend their money on goods and services. Ever since the 2008 financial crisis, we see the US economy strengthening and gaining stability, and a decline in any uncertainty in the stock market, so much so that, it is prime time for consumers and investors to spend their hard-earned income on properties and real estate, be it, the ranches for sale in Oregon or the houses for sale in Idaho.
President Trump had signed the Tax Cuts and Job Acts of 2017 which had become effective as of the beginning of 2018, and as an outcome, the SALT (State and Local Taxes) deduction has been reduced to $ 10,000. So taxpayers with $ 100,000 income and above can reap the benefits of SALT, whereas taxpayers with a lower income will see an increase in their tax rates. This, in turn, might force the state and local governments to reconsider or lower their tax rates therefore, making it more affordable to consumers to buy and invest in state and local services.
The Tax Cuts and Jobs Act 2017, has had a direct effect on the housing and real estate market of the US. States like Washington, Wyoming, Alaska, Nevada, etc. are states without income taxes, and according to the reports from American Legislative Exchange Council these nine states without income taxes are outperforming those nine states with the highest income tax in, employment, tax revenues and population growth. These regulations are making states including Washington, Tennessee, Nevada and Texas more attractive to consumers who expect their tax liability to rise. So, what are you waiting for, discuss your options with a real estate agent and look into farms for sale in Washington!
So, here’s the situation, when consumers are willing to buy or real estate, they would obviously prefer lower interest rates. Depending on the stability of the economy which is influenced by the stock market, and the confidence of the investor (usually the bank), the interest and mortgage rates could go up or down. Whenever we see stability in the stock market, we see an increase in the consumer’s confidence in paying back loans, due to which banks begin lowering their mortgage rates. The opposite could also happen for example, in 2008 when the stock market was extremely volatile, this caused banks and investors to increase mortgage and interest rates exponentially, therefore leading to less consumer confidence and less consumer spending.
According to the stats, this year we’ll be seeing banks slightly upping the mortgage rates as well as interest rates. To fulfill the chain of supply and demand, the Federal Reserve will also be increasing interest rates to some extent. Many economists believe that the increase will be minor, but even a minor increase can deter consumers from shopping for houses and real estate.
In short, there are many factors that go into real estate shopping, so before you go looking into investing your hard-earned money into any sort of property, get up to speed and keep yourself updated on the situation of the stock market and real estate market.
Good Luck finding the right Home and Real Estate for you!