Important Factors That Drive The Real Estate Market

Important Factors That Drive The Real Estate Market

In this article, we will be discussing some important factors that drive the real estate market. Moreover, every individual that wants to tap into this industry should be aware of these factors.

The Economy of a Country:

Firstly, the economy affects many business sectors and the real estate industry is no exception. The overall health of the economy affects the market value of all properties being rented and sold in that economy. Moreover, the health of an economy is determined by unemployment rates, GDP and many other factors. Additionally, the economies performance determines the state of the real estate market, meaning the real estate market only thrives in a good healthy economy.

Government Policies & Subsidies:

Secondly, some of the government policies that increase the interest in the real estate market are tax credits, deductions and subsidies. Furthermore, government incentives determine the change in the market supply and demand for products and services.

Interest Rates:

Mortgage interest rates are highly impactful when it comes to the real estate market. Whenever you consider purchasing a home with a mortgage loan, these different rates affect the prices of properties in the real estate market. Therefore, the fluctuations in interest rates can affect an individual’s ability to purchase a property. Moreover, higher interest rates means an increase in the cost of a mortgage.


Lastly, a demographic is simply, the compiling of data on the number of people in a specific area, distinguished by their age, gender, income, race etc. Therefore, demographics affect the real estate market by enforcing new real estate trends as the years go by. Furthermore, popular real estate trends can affect the real estate market for many decades. For instance, a recent trend of owning a second home is being carried out throughout the years and is bound to continue for the next few decades.

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