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July 28, 2014

Key Drivers Shaping the Housing Market

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Key Drivers Shaping the Housing Market

What factors are shaping the housing market's outlook? 

The Counselors of Real Estate, a group of real estate professionals and advisers, conducts surveys of its members annually to compile a list of the top 10 factors influencing the housing market this year. The key factors identified this year include a range, from low interest rates to Generation Y’s housing preferences to weather catastrophes. 

Millennials’ housing preferences are being placed under the spotlight this year as many view this age group as key to the future housing market. Recent surveys have shown that this generation differs in housing preferences from previous generations. For example, many Millennials are showing a preference for urban, walkable neighborhoods that offer close access to public transportation.

Weather catastrophes—such as the recent deadly Oklahoma tornadoes—are shaping the housing market, and climate change implications are also having a big impact on coastal properties, according to the real estate group.

Another key issue the group identified is a resurgence occurring in the capital markets. Some recent surveys have indicated that lenders are loosening up their underwriting standards. Tightened credit conditions have been keeping many potential home buyers on the sidelines. 

The group also said the rising demand for health-care facilities and medical services among aging baby boomers has sparked a higher demand for real estate to house medical services. Many home owners are also facing caring for their aging parents, which is also playing a part in shaping their housing needs. 

Source: “Real Estate’s 2013 Pivot Points: Interest Rates, Gen Y, Health-Care Demand,” The Wall Street Journal (June 5, 2013)

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