- Interest Rates Will Rise. It should come as no surprise that the Fed is gradually raising interest rates. However, this should not scare away buyers. The rate at which the Fed has decided to increase rates will not have a major effect on purchasing. A 30 year fixed rate mortgage will be the least effected by the slow hike. Although rates will rise, worrying should not!
- Home Prices Will Continue to Rise. With the housing market strengthening we will see a rise in home prices. Zillow has projected an average 3.5% increase in home values. Good news is that this increase is not uncommon and it’s sustainable!
- The Struggle For First Time Home Buyers Will Continue. Due to stagnant wages and rising rent prices first time home buyers have not been able to save up enough money for a down payment. Furthermore, rising home prices is another hurdle that has prevented first time home buyers to enter the market. The median age of a first time home buyer has increased to 33, an historical high. However, with programs like Coastlend’s 3% down NO PMI first time home buyers will finally be able to enter the market. Click here to apply now!
- Rent Prices Will Continue to Rise. It’s a well-known fact that it is cheaper to buy than rent. Throughout the past couple of years, there has been a tremendous increase in rent prices. In some markets, rental prices have risen quicker than homes. According to Trulia, it is 36% cheaper to buy than to rent. Furthermore, rent has been projected to rise up to 8% in 2016.
- The Suburbs will become the hot spot. In the past many buyers were looking to purchase in the city. However, as millennials get older and begin to start families they’ve made the move towards the burbs. But, there are some requirements; they prefer public transportation, job opportunities, close proximity to the city, and walkable main streets.
- Smart Homes & Going Green. Our last article discussed the popularity of smart homes. Home buyers have begun taking interest in smart technology. Products such as, smart doorbells and smart thermostats tend to increase home values. Going green has also become a trend in the housing industry. Baby boomers prefer eco-friendly homes that are energy efficient and a healthier indoor environment. This trend has become so popular that up to half of builders and 39% of re-modelers are working on eco-friendly projects.
- Videos will begin to replace photos. Virtual videos may not be new to the real estate industry but it was never a popular feature. Having a virtual tour or video will help your home stand out! These virtual videos allow sellers to highlight the best parts of their home and give buyers a 360 view if they are not able to do a walk through.
- New Construction Homes. Although new construction homes took a big hit during the recession they have made a comeback. With a projected 26% increase in 2016, these homes are becoming more and more popular among home buyers. The ability to choose your finishes and know that you were the only one living in the home is a major plus in the housing industry.
Some of these trends have rolled into 2016 from last year but have become even more prominent. Whether they’re new or old, all 8 of these trends have had an effect on the housing market. The high rent prices have driven renters to purchase a home and move to the suburbs. The need to purchase has risen and therefore so have home prices. These have all contributed to the strong market that we’re currently in! If you have any questions about these trends or getting a loan give Coastlend Mortgage a call, 843-388-5763.