Self-Directed IRAs: A Key Strategy in the Current Housing Market

Asheville, NC, January 29, 2025 --(PR.com)-- According to a recent WSJ.com article, in 2024, U.S. existing home sales declined to 4.06 million, marking the lowest level since 1995 and the second consecutive year of weak sales. This downturn is primarily attributed to persistently high mortgage rates, which fluctuated between 6% and 8% throughout the year, making homeownership prohibitively expensive for many Americans. Rising home insurance and property tax costs further exacerbated the financial burden on homeowners. Despite the Federal Reserve cutting short-term interest rates three times last year, mortgage rates remained above 7%, creating a significant psychological barrier for both buyers and sellers.

Rick Palacios Jr., director of research at John Burns Research & Consulting, anticipates continued sluggish momentum heading into 2025 unless mortgage rates decrease. Home prices, though slightly lower than their record high in mid-2024, continued to rise due to tight inventory levels. This challenging housing market led both 2024 presidential candidates to commit to addressing the high costs of housing. Some optimism remains for a potential uptick in sales during the spring selling season, but the market remains significantly below pre-pandemic levels, heavily impacting mortgage lenders, real estate brokerages, and home-goods stores.

Adapting to a Challenging Housing Market

The news that U.S. home sales in 2024 have fallen to their lowest levels in nearly 30 years is a sobering reminder of the economic challenges we face as a nation. At American IRA, they understand how fluctuations in the housing market, interest rates, and affordability impact not only traditional homeowners but also investors relying on real estate to build long-term wealth.

In times like these, it’s critical to explore alternative strategies to secure financial freedom. Self-directed IRAs provide a unique opportunity for individuals to invest in alternative assets such as real estate, even in a constrained housing market. These tools empower investors to take control of their retirement planning and diversify their portfolios to include assets like private lending, tax liens, and real estate syndications — options that are often overlooked but can offer resilience in volatile markets.

Jim HITT, CEO of American IRA had this to say about the WSJ.com article:

"While high mortgage rates and rising costs pose challenges for many, they also highlight the importance of exploring alternative investment strategies. Self-directed IRAs empower investors to take control, diversify, and build long-term wealth — even in a constrained housing market."

While high mortgage rates and limited inventory are real challenges, they also present opportunities for creative and strategic investors. For instance, buying rental properties in cash through a self-directed IRA can allow investors to avoid traditional financing hurdles altogether, while still taking advantage of long-term property appreciation and rental income.

At American IRA, they are here to help investors navigate these challenges with education, tools, and support to take advantage of alternative investment opportunities. While the housing market might feel uncertain, retirement goals don’t have to be placed on hold. The key is staying informed, adaptable, and proactive about securing your financial future.