Many successful immigrants to the United States consider investing in U.S. real estate as an important financial strategy for global asset allocation. So, what is the trend of the U.S. economy in 2015? How will the real estate sector develop? WorldWay Immigration experts summarize the following four highlights of the U.S. economy in 2015, with the real estate industry at the forefront.
Highlight One: Strong Recovery in Real Estate Prices
The role of the real estate market as a pillar industry in the U.S. economy can be described as "success and failure depend on it." The sharp decline in real estate prices at the end of 2006 triggered the subprime mortgage crisis, which in turn led to the "once-in-a-century financial crisis," severely impacting the U.S. economy, which subsequently experienced five years of stagnation.
Since the Federal Reserve implemented the third round of quantitative easing monetary policy on September 13, 2012, printing $40 billion each month to purchase real estate securities to stimulate the recovery of real estate prices. In 2013, real estate prices saw a strong recovery, with a year-on-year increase of 13.7%; from January to September 2014, real estate prices increased by 4.88% year-on-year, but had not yet returned to the peak of real estate prices in May 2006.
On December 9, 2013, the Federal Reserve announced that due to the strong recovery of stock and real estate prices, U.S. household wealth increased to $77.3 trillion in the third quarter, an increase of $12.94 trillion compared to before the financial crisis. This is both a result of over four years of economic recovery and lays the economic foundation for moderate recovery in 2013-2014 and strong recovery in the future.
Highlight Two: Financial Markets are Very Active, with Strong Recovery in the Three Major Stock Indices
Stimulated by the Federal Reserve's quantitative easing monetary policy, the Dow Jones Industrial Average rose from 13,413 points on January 2, 2013, to 16,221 points on December 30, 2013, an annual increase of 21%. During the same period, the Nasdaq index rose from 3,112 points to 4,104 points, an increase of 32%, and the S&P 500 rose from 1,462 points to 1,818 points, an increase of 24%, indicating a bullish market. In 2014, although the three major stock indices experienced fluctuations, they continued to maintain an upward trend. The Dow rose from 16,441 points on January 2 to 17,823 points on December 31, an increase of 7.5%; the Nasdaq rose from 4,143 points to 4,736 points, an increase of 13.4%; and the S&P rose from 1,832 points to 2,058 points, an increase of 11.4%.
In American society, everyone is involved in stock trading. With the rise in stock indices, selling stocks becomes cash, which stimulates consumption and drives economic recovery. However, in contrast, stocks are mostly held by the wealthy, and the stock market boom exacerbates polarization.
According to the plan, the Federal Reserve is expected to start raising bank deposit interest rates three to six months after stopping quantitative easing. This means that after banks begin to raise interest rates in the spring of 2015, some funds will flow back from the stock market to banks, which will be unfavorable for the continued rise of the three major stock indices and may even lead to a decline.
Highlight Three: Consumer Loans Continue to Rise, Driving National Consumption
The Federal Reserve publishes monthly data on consumer loans, which reflect the state of personal consumption expenditures in the United States, accounting for about 70% of the U.S. Gross Domestic Product, making it the main engine of economic growth.
Since August 2012, consumer credit has been continuously increasing. By October 2014, it had increased for 27 consecutive months. This is the main driving force behind the recovery of the U.S. economy, guiding strong recovery and steady growth in 2015.
Highlight Four: Manufacturing Sector Stabilizes
Data shows that from July 2013 to December 2014, the Purchasing Managers' Index (PMI) was above 55 for 15 out of 18 months, indicating an expansion phase. This shows that the U.S. manufacturing sector is stabilizing. This also aligns with President Obama's call for "reindustrialization."
With economic globalization, the U.S. manufacturing sector has experienced "hollowing out." The once-in-a-century financial crisis destroyed years of economic prosperity in the U.S. and Europe. After President Obama took office on January 20, 2009, he vigorously promoted "the return of manufacturing," implementing a series of policies and legislation. On July 7, 2014, the White House National Economic Council released a report stating that U.S. manufacturing output had significantly increased over a period of time. Since 2010, manufacturing has created 646,000 jobs, the fastest growth rate since 1990. After five years of effort, the U.S. manufacturing sector has shown good development momentum. A number of multinational companies are either relocating their production bases back to the U.S. or opening new factories domestically. The U.S. manufacturing sector has seen the first sustained job growth since the 1990s, and foreign trade exports have also significantly increased, with exports growing by 23% from 2010 to the end of 2013. However, there is still a long way to go before exports double by the end of 2014.
WorldWay Immigration experts analyze that most people immigrate to the United States not only for its superior living environment but also for its soft environment, especially advanced educational resources. The U.S. EB-5 investment immigration program is popular due to its simple application conditions and short processing time. One application allows the entire family to immigrate. After obtaining a green card, individuals can freely enter and exit the United States and reside and work anywhere in the country without immigration monitoring.
The key to successful U.S. EB-5 investment immigration lies in choosing the right project. In the fiscal year 2015, U.S. investment immigration will face significant events such as the arrival of visa backlogs, a surge in applications, and the expiration of the regional center program, which may likely increase investment amounts. Therefore, choosing EB-5 projects that have been pre-approved by the U.S. Citizenship and Immigration Services becomes a better option to cope with uncertainties. The Pennsylvania Turnpike project and the New York Liberty Garden luxury apartment project launched by WorldWay are both high-quality EB-5 projects pre-approved by the U.S. Citizenship and Immigration Services. Consultation hotline: 400-138-2929.
