Home prices in some states are tipped to increases in 2018, thanks to more Americans that will continue to move to other low-cost states.
The National Association of Realtors (NAR) believes that interstate migration will serve as a major reason for higher property prices. Hence, home builders will see an opportunity for business. Cash-strapped companies should consider funding assistance through programs such as Housing and Urban Development (HUD) multifamily financing loans.
Exodus of People
NAR chief economist Lawrence Yun said that housing values in Utah, Florida and Texas are some of the states will climb in the near future. On the contrary, home prices in Connecticut, Illinois, New Jersey and New York will drop due to more Americans that leave these states.
Despite the lower prices in some states, the nationwide home values will likely increase this year. Based on a CoreLogic forecast, U.S. home prices will increase by an estimated 4%. While higher values seemingly benefit home builders and sellers, it puts buyers at a disadvantage as many become priced out of the market.
Affordable Housing Problem
First-time buyers will notice the greater difficulty of purchasing homes due to the growing interstate migration activity. Aside from property prices, rental costs have become more expensive. In Utah, for instance, many people have been forced to be buried in debt just to afford payment for their apartment.
Average rents for a two-bedroom apartment in Park City and Salt Lake are the least affordable at around $1,500 and $1,400, respectively. It will cost you slightly more than $1,200 to rent the same unit in Cottonwood Heights. Cedar City has the cheapest rent at $716.
As the interstate migrant population in some states increase, you can expect home prices to continue its upward trend this year. Home developers should see this as a reason to build more properties not only to drum up business but also help in solving the low-cost housing issue.