Asset Classes

Residential Real Estate

Plural Name
Parent Asset Class

Residential real estate is an area developed for people to live on. Residential areas encompass a large variety of potential dwellings, from houses to houseboats, and from neighborhoods types ranging from the poorest slum to the wealthiest suburban subdivision. Residential real estate includes undeveloped land, houses, condominiums, and townhouses. The structures may be single-family or multi-family dwellings and may be owner-occupied or rental properties.

Residential Real Estate Demands

  • Long-term mortgage interest rates can impact sales significantly
  • The home price consumers can afford is driven by their incomes
  • Lock-In Effect
    • If rates rise, many people will stay put if they have locked in mortgage at lower rates
    • Moving would require them to get a new mortgage at a higher rate!

What Can Americans Afford?

  • Safe estimate is 3.5 times income
  • Translates to $217k in 2017

Residential Real Estate Indicators