Relocation in the U.S.: Home Sales Relax, Robust Job Growth, and Low Mortgage Rates
Posted by: Jeff Buckley, Regional Director, Cartus Broker Services
As U.S. housing markets continue to improve, changes in the home sale landscape, robust job growth, and drops in mortgage rates will impact relocation programs. Cartus, along with the Relocation Directors Council (RDC), provides an update of U.S. market trends in our latest U.S. Market Watch, with a look at what to expect for the remainder of 2016 and into 2017, including home sale prices, housing inventory, job growth, and the U.S. rental market.
- Home sales dip: existing-home sales experienced their first year-over-year drop since November 2015, due mostly to low inventory and its impact on affordability.
- Home prices continue to rise: home prices increased 6% year-over-year in July 2016. Home prices have increased 41.3% since bottoming out in March 2011.
- Mortgage rates drop: the average interest rate on all mortgage loans was 3.63 in July, down from 3.7 in June. Brexit may drive rates even lower.
- Inventory remains low: inventory supply was at 4.6 months in August, below the six months considered a balanced market.
- Homeownership rates: boomerang buyers are reentering the housing market at a more gradual rate than expected. Reentry, even at this slower rate, has the potential to boost homeownership levels over the next few years.
- Job Growth continues to trend upward: an additional 255,000 people secured employment in July. The jobless rate, 4.9%, has fallen by more than half since October 2009 (10%).
What Guidance Should Relocation Managers Give to their Employees?
Relocation managers need to stay informed about mortgage and real estate markets to ensure that their policies and programs are in line with current trends. Continued low housing inventory and rising home prices can create a challenging market for transferees. You will need to provide your transferring employees with more in-depth counseling regarding market conditions in order to prepare them for buying and selling their properties. Transferring employees need to be sure to keep all their records in order so immediate action can take place when an acceptable property is located.
We will continue to keep you updated on the improving U.S. real estate markets and economic outlook. For more key market trends and best practices that you and your relocating employees need to know, download our September U.S. Market Watch.
The RDC provides up-to-date real estate market information, including median sales prices, active listings, days on market, and more. RDC members, many of whom are part of the Cartus Broker Network, are recognized leaders in the relocation industry and are known for their delivery of exemplary, comprehensive service to their corporate clients, transferees, and industry partners.