Americans Have More Cash In Their Pockets – Now You Can Cash In Too On USA Property

usa-propertyThey say that money doesn’t buy you happiness, however getting some extra cash in my pocket always gives me a good feeling.

I’m not the type to go and blow too much of it on luxuries, but I do like to use it to buy some of the bigger things in life like property.

Having that bit of extra cash also brings a bit of security, particularly following a long recession where we have all been worrying a little too much about where the next paycheck or payment is coming from.

Knowing I have a little extra in my wallet just takes the pressure off and this is what many Americans must be thinking after getting their 3% pay rise this past 12 months.

They are also starting to look at their properties as assets again rather than the liabilities they have been in recent years. Some will be thinking the same thing about their jobs too.

The Median weekly earnings of the country’s 102.8 million full-time wage and salary workers was $771 in the second quarter of 2012 according to the U.S. Bureau of Labor Statistics released this month. Not bad for a week’s work and this was 2.4 percent higher than a year earlier and above the rate of inflation.

In the UK meanwhile we see wages failing to keep pace with inflation and there is one other thing about US wages that investors should take note of…

Average weekly earnings have risen 0.5 percent in the past month. Top-performing employees meanwhile will get an average pay rise of 4.4 percent this year, according to consulting firm Mercer.

So how will this extra cash in American pockets help you as an investor in USA property?

It is really quite simple. Long term growth in property prices is strongly linked to wage inflation. If wage growth is strong and people are earning more, then they will be driven to pay more for property.

The ‘if you don’t then someone else will’ factor is one of the BIG drivers of property markets.

As my analyst friends would tell you, the one good thing about economies is that wage growth continuously outstrips consumer inflation, or at least it will do in advanced economies like the United States.

So if USA wage growth continues to be strong, investors can expect to see the value of their investment rise as well as the rents people are prepared to pay.

Are you feeling confident about USA property? Please leave your comments below:

Kind regards

Loxley McKenzie
Managing Director

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