E Should You Bet On Rising US Property Prices?

The US property prices retain an upbeat outlook as they continue to rise at an average of more than 11% since last year. Last month, analysts polled by Reuters said that the current upswing in housing prices is likely to continue throughout the year with two-thirds of the 34 analysts expressing an optimistic view of the market.

This creates an exciting opportunity for property market investors looking to profit from US real estate. However, while this may be exciting to investors, people looking to buy houses for ownership may not be as eager.

                                                                Image Source: Unsplash

Time to bet on the housing boom?

Data shows the US 30-year mortgage rate rose to an average of 3.3% this year. Last week, the rate fell to 3.08% after the housing bull-run decided to take a breather. It is expected to rise higher to 3.6% next year before reaching pre-covid highs in 2023. The problem is that the current mortgage rates are too high given the prevailing Funds Rate of just 0.25%. It could get higher if the Federal Reserve decided to hike rates in the foreseeable future. 

The good news is that no hike is expected until at least the next presidential election. This could be an opportunity to bet the US housing market’s bull-run. While prices may seem high, they are only likely to go higher unless a housing market crash occurs. 

One of the factors that investors may want to consider when investing in the US property market is that states have different property tax laws. So, don’t invest too much to overburden your tax liability. Some people have lost their properties for failing to foresee such situations. It has led to the rise of property tax loan firms that try to bail out those who get stuck paying their property taxes.

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Disclosure: The material appearing on this article is based on data and information from sources I believe to be accurate and reliable. However, the material is not guaranteed as to accuracy nor does ...

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William K. 3 months ago Member's comment

One caution not to be overlooked is the integrity, or lack of it, of the issuers of those mortgage issuing organizations. There are problems when a share is based on loans that then default, and that happened a lot just a few years back. And since I am not aware of any new rules demanding improved integrity for those mortgage sellers, I see no reason to assume that such securities are any more secure than last time. AND, consider that even those securities backed by better quality loans may suffer defaults if the economy stumbles a bit farther.