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The housing market has been giving mixed signals to the consumer markets off-late. In terms of gauging its trends- be it an upward trend or a downward one in many prominent markets has been a mixed bag of trends. Beginning with many economies are struggling to purchase brand-new homes and end up paying rentals and mortgages. In most cases, the struggle to own an affordable home has been a distant dream for the new generation of home buyers.
Situation analysis-India
In the case of India, the real estate market is growing strong, especially in the affordable homes segment. In most cases, people in search of affordable homes end up in cities like Kolkata and Pune which are followed by Delhi NCR, Bengaluru, Hyderabad, and Chennai. There is a catch in terms of the affordability tag since people need to spend a significant portion of their income on the EMIs to complete the loan taken for their dream home. In recent times, the central bank of India has raised the rates for the interest of the loans taken. It has pushed the affordability trends to 2.5 percent across the nation. This has to continue as long as the central bank continues to hike its rates to keep inflation in check for its citizens. Currently, the Indian housing market would continue to remain costly, considering the RBI’s fight for controlling inflation and keeping its economic parameters in check.
Status Report in the United States of America
The United States of America has a different scenario altogether. Off late the economy is said to have surged with better job opportunities. With the economy more or less stable with the rate hikes, the housing market did take a toll in terms of high mortgages in the housing market. Adding to this is the high mortgage rates prevalent in the market. The mortgage pricing has gone up by close to 7 percent which was last seen highest in the last two decades. In recent months, there has been a rise in the construction of new houses, which seems to be a good sign for the economy, there is a fall in the purchase of new homes. People prefer to go in for rental spaces rather than a new home since it’s a much cheaper option. The low purchase of homes also pointed to the fact that the economy is showing signs of a slowdown. Only the economic parameter-based data would show the performance in the next quarter and would set the precedence for what the economy is to perform in 2024.
From the views observed the world is going through uncertain times with a slowdown a possibly a recession in the cards. Many of the markets have shown mixed reactions last couple of months, and what stands out would be the final economic indicators in the final quarter of 2023. Affordability has been one of the important issues for new home buyers, and still remains an important issue that should be addressed worldwide.
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