In the past five years, the average price of a piece of land has increased significantly. While many factors have contributed to this increase, Real Estate Expert Damon Becnel says the most notable reason is the population growth in urban areas. The demand for land in these areas is high, and as a result, prices continue to rise. This trend is likely to continue in the coming years, so it's essential to understand why land prices are increasing and how it could impact you.
The Population Of The United States Has Increased, Causing An Influx In The Demand For Housing
The population of the United States is growing, and with that comes an increased demand for housing. According to the National Association of Realtors, the average price of a home in the United States has increased by nearly 5% over the past year. While many factors contribute to this price increase, one of the most significant is the increasing demand for land. As the population continues to grow, more and more people are looking for places to live, which drives up the price of land. In addition, as the economy improves, more people can afford homes, further increasing the demand for land.
Combining these factors has resulted in a sharp increase in land prices, making it difficult for many people to purchase a home. However, despite the challenges, the population growth of the United States provides a unique opportunity for investors and developers to profit from the increased demand for housing.
As the population of the United States continues to grow, so does the demand for housing. This trend has caused land prices to increase significantly, making it difficult for many people to purchase a home. However, despite the challenges, the population growth of the United States provides a unique opportunity for investors and developers to profit from the increased demand for housing.
Investors Have Been Purchasing Large Amounts Of Property, Contributing To The Increase In Prices
Another reason land prices have increased is that investors have been purchasing large amounts of property. According to The Wall Street Journal, "Institutional investors-such as pension funds, insurance companies, and real-estate investment trusts-have been buying more farmland in recent years as they seek higher returns than they can get from stocks or bonds." These investors are willing to pay top dollar for the land, which drives prices and makes it difficult for regular people to purchase a home. In addition, these large investors often buy land in bulk, which further reduces the availability of land and contributes to the increase in prices.
The Average American Is Also Getting Older, Meaning They Are More Likely To Want To Stay In Their Current Home As They Age
As the population of the United States continues to grow older, another factor contributing to the increase in land prices is that more people choose to stay in their current homes as they age. According to AARP, "the number of homeowners aged 85 and older has increased dramatically over the past decade-from about three million in 2005 to more than five million in 2015." This trend is likely to continue as the baby boomer generation ages. As more and more people choose to stay in their homes, the demand for land decreases, which drives up prices.
Mortgage Interest Rates Are Still Relatively Low, Making It A Good Time To Buy A Home
Despite the challenges of purchasing a home, mortgage interest rates are still relatively low, making it an excellent time to buy a home. According to Bankrate, "the average 30-year fixed mortgage rate is at its lowest level since September 2017." This makes it an ideal time for many people to purchase a home, despite the challenges of finding affordable land.
These lower rates have helped offset the higher land prices, making it easier for people to purchase a home. In addition, Damon Becnel says many people who have been waiting to buy a home may finally be able to do so, as the combination of lower mortgage rates and increased wages has made it more affordable than ever before.
Final Thoughts
The population of the United States is multiplying, and with that comes an increased demand for housing. There has been a steady decline in the number of homes available for sale, which has driven up prices. The average American is also getting older, meaning they are more likely to want to stay in their current home as they age. Investors have been purchasing large amounts of property, contributing to the increase in prices. Mortgage interest rates are still relatively low, making it an excellent time to buy a home. Despite the challenges of finding affordable land, now is an excellent time to purchase a home.
