As the prices for bonds fall and those of stock influx, many investors are now trying to find shelter in the housing market which is on a boom. However, according to 2 researchers at Atlanta Fed, this could be a losing intention. The prices for homes plunged by 33% in 2006 and since then, they have not yet returned to the peak achieved that year. The appeal for investing in single-family houses has only been boosted by the deep discounts present.
While talking to CNBC last year, Warren Buffet (an investment sage) said that if it were practical, he would procure a couple of hundred thousand single family homes. With the prices for single family homes increasing by 12% many investors have gone ahead and done as Warren had said. Even though the real estate market looks like a rich ground for investing in the long term, Jessica Dill and Ellyn Terry, the 2 Atlanta Fed researchers, found out otherwise when they analyzed the numbers in the real estate market back to the year 1926. In their findings, a house hardly ever brings returns that are more than Standard & Poor’s 500 stock index. This is based on a homeownership period of an average of 13 years
The two researchers said that comparison shows that equity investment has more favorable returns than investing in the real estate, especially in the case where the house has been bought as an investment and not a home. Furthermore, the increased demand in the housing sector for single family house has only been heightened by the hedge funds and other investment pooling people have made so that they cash in on the current housing recovery. The smaller investors have also been snapping houses up and then renting them which has led to bidding war in some locations.
With the interest rates starting to go up, some other investors have let go of other types of asset with the treasury bonds which is considered a tradition safe haven among them. The ongoing increase in the interest rates will continue to put off the bond prices especially with the signals from the Federal Reserve of their intention to put to an end the 5-year policy of containing the borrowing costs .According to comparisons, even though the stock returns were more volatile, this was dampened over long periods of holding.
Even though investing in the real estate looks promising, there have been signs showing that the quick money may already have been made. 1st the sharp increase in the prices for homes has started to cool down due to the high mortgage rates. The demand for housing in the future also looks like it will dampen due to the strict lending standards. According to Ed Stansfield, a Capital Economics’ housing economist the increasing interest rates will also affect the market negatively as it will increase the monthly payments for the buyers, a situation which will make it hard for homebuyers to be qualified for loans in the future.
3 Of The Best Foods and Drinks To Aid Your Sleep
Getting a good night’s sleep is hugely important for your overall health and wellbeing. Studies have shown that having a...
Why You Should Consider Volunteering
Volunteering has many benefits both to you, your community, and your CV. Whether you do it alone, or with a...
Investigating The Important Factors In Legal Software Testing
Fulfilling the digital transformation objectives with QA testing services has become an important phase for all industry verticals. Today, every...
Multiply Your Magento Store’s Sales With Affiliate Program
Are you struggling to boost your sales and expand your customer base due to the significant increase in marketing expenses?...
How COVID-19 Is Changing Plastic Surgery
There’s been changes to practically everything in our everyday lives, including industries such as plastic surgery. With practices having to...
Benefits and Drawbacks Of Getting A Taxi and Renting A Car
If you’re planning a vacation or business trip, you must decide whether or not to rent a car ahead of...
8 Killer Tips to Make Your Portfolio Website Standout
A portfolio website is one of the easiest and most straightforward ways to showcase your work. Although you have a...
3 Reasons You Need A Mobile-Responsive Email Marketing Platform
Repeat after me. Creating email interfaces with mobile-first ethos and UI is key to the success of email marketing campaigns....
Mother and Nature Active Maternity Wear, How It All Started
5 months pregnant and very happy about it, not much to complain about. Everything was going ok (famous last words). ...
How To Make Sure Your Toddler Has A Balanced Diet
As your baby grows into a toddler, they go through a period of intense mental and physical development, as their...
The Top 3 Vitamins and Minerals To Support Your Fitness Goals
You can spend hours in the gym, but without fuelling your body properly, it will be hard to see the...
Best Cities To Invest In Real Estate Across The UK
If you’re looking to invest your money, real estate has historically offered a safe investment with good returns. You gain...
7 Ways You Can Power Your House
In case you are remodeling your home and are considering a more eco-conscious approach, you are probably looking into various...
The Pro’s and Con’s Of Chemical Peels
A chemical peel is a non-surgical cosmetic procedure that resurfaces the skin to give it a refreshed, soft and smooth...
Street Vs. Skate Trends
Streetwear is a massive global trend that’s origin comes from skate styles that have been altered. Streetwear is everyday clothing...
- Tech6 years ago
Creating An e-Commerce Website
- Tech6 years ago
Design Template Guidelines For Mobile Apps
- Business5 years ago
The Key Types Of Brochure Printing Services
- Travel8 years ago
Who Else Wants Also Nfl Hat
- General5 years ago
Kobe Bryant With His Unique Nba Jerseys
- Tech6 years ago
Why Small Businesses Can't Ignore Mobile Technology
- Tech6 years ago
Climb Google Using These Checklists
- Health7 years ago
Health Supplements For Sports Activities Nutrition