The housing market has had a turbulent few years, so what can industry experts expect in the future? You can pay attention to many indicators, but the recent infrastructure bill will reveal the most crucial information. These are a few ways it will affect real estate in the months ahead.
1. Construction sites will be on schedule
Federal plans may move slowly, but that doesn’t mean they won’t make a splash. The Infrastructure Investment and Jobs Act – also known as the Bipartisan Infrastructure Bill – was passed in November 2021 but will soon affect the country. After months of paperwork and organizing teams, many experts believe that the allocated funding will start to positively affect the real estate market.
Largest immediate impact helps current and future projects building sites. About $17 billion will be used to strengthen ports that have suffered from inflation, thereby improving the supply chain for building and construction. Delays will become less frequent, encouraging more people to invest in new residential and commercial real estate and allowing construction companies to serve more customers faster.
2. Power grids can become greener
Many people want their homes and businesses to use green energy as a secondary or primary source of electricity because it saves them more money on their monthly electricity bills.
Residential homes, in particular, would save $500 a year by using sustainable energy. It may be a costly upgrade for individuals, but the infrastructure bill provides a $65 billion investment for smart grid technology that makes national power grids greener.
The infrastructure bill enables this expansion of renewable energy use by building thousands of miles of transmission lines and investing in research and development in initiatives such as carbon capture and distribution technologies of electricity.
Many current and potential homeowners are burdened with the high cost of utilities, especially in the outdated housing stock, so expanding clean energy options holds promise from both an affordability and environmental.
The initiative will also allow municipal governments to adopt ambitious energy targets. In New York, for example, commercial properties over 25,000 square feet must post their energy efficiency benchmarks each year to increase transparency about green improvements. As energy efficiency becomes a more visible data point, it is likely to become a marketing pitch for environmentally conscious tenants and buyers.
3. Secondary real estate markets on the rise
The residential housing market around cities of all sizes is becoming more expensive than most income earners, preventing new owners from exiting rentals. This is why people are looking for more affordable homes in rural areas, but this type of move is not possible in places where people cannot move due to collapsing infrastructure.
The infrastructure bill will invest $110 billion to fix roads and bridges, making motoring more manageable for those commuting to cities. Others will see a more manageable future there and buy houses in rural areas because they won’t have to sacrifice their current job to live in a house.
4. High-speed Internet will improve
Internet access will improve in several ways thanks to the infrastructure bill. Part of the $65 billion investment in advanced technologies will pay for expanding Internet access in rural communities. It will also make high-speed connections more affordable, which will impact residential and commercial real estate markets.
Neighborhoods away from major cities will become more attractive to potential buyers who don’t want to lose great upload and download speeds just to find affordable housing. Business owners can also move anywhere. They won’t have to worry about losing customers due to their inability to access the company’s website or use virtual payment services effectively.
Homes in both rural and urban areas gain in value when they have access to high-speed internet. The Infrastructure Bill’s Internet upgrades will permanently bring more rural neighborhoods into the world of affordable high-speed Internet, and these homes will become more in demand. Prices will skyrocket as more people move into housing outside cities, as supply will soon become limited.
It will take time for upgrades like fiber internet to be completed due to installation delays, but the impact on the housing market will be worth it. This is perhaps the last thing that prevents some people from looking for their future home outside the cities.
5. More people will get jobs
Large investments in many sectors of the economy will result in more well-paying jobs than before. The bill states that this will create more than 2 million jobs per year and will continue to do so for a decade. About 20 million jobs over 10 years give workers more money to put aside to buy a house.
National and regional leaders are meeting to discuss how best to allocate their funding to make these jobs accessible to graduates and non-graduates. It is particularly important to invest in the training and development of a diverse workforce, which would open the market to underrepresented communities who otherwise could not access homeownership due to the stagnation of housing. low wages and limited job opportunities.
What does it have to do with real estate? More opportunities and increased earning potential make buying a home more attractive and feasible. Agents, appraisers and other industry professionals can reasonably expect a strong job market to mean more Americans are entering the real estate market for the first time.
6. What’s going on with inflation?
Inflation has been a recurring theme in recent headlines. It started to increase when the pandemic started in 2020 due to persistent supply chain issues coinciding with changing consumer demand. Inflation peaked at 7.9% in February 2022 and recently picked up due to Russia’s invasion of Ukraine — economic sanctions put upward pressure on gas prices. The invasion would account for a third of the increase in the price index from February.
Given that part of the problem has to do with supply chain issues and consumer demand, there is some hope here. The injection of funding into the economy through the decade-long infrastructure bill will improve the ability of the supply chain to meet demand and grow. Of course, this bill will not act quickly enough to alleviate the immediate pressures.
It’s hard for any economic expert to make clear predictions, especially given its global reach – central banks around the world are looking to tackle the same issues. The Federal Reserve is expected to try to rein in inflation by raising interest rates this quarter.
This is a good metric that real estate professionals need to monitor. Money is worth more when inflation becomes less of a concern. Anyone saving for a home or buying property will get more for the same amount of money. Sellers will also have an easier time finding buyers because people will be able to spend more freely.
Look for upcoming real estate changes
We are going through a period of contradictory economic trends. While unemployment rates are at impressively low levels and many American professionals are well positioned to find good jobs and see corresponding wage growth, inflation is also putting pressure on household budgets. We are also still witnessing a competitive housing market and supply chain confusion due to the pandemic, global conflict and soaring consumer demand.
The US economy has a lot to sort out. In the long term, however, the infrastructure bill will affect the real estate market and professionals can expect positive changes overall. Properties will appreciate and sell faster than in recent years as more people accumulate their savings, find new jobs and see rural neighborhoods become accessible.