What Today's Real Estate Trends Mean For Buyers
Housing market trends are an important piece of the puzzle for aspiring home buyers. Many regional markets are extremely competitive, and prices have skyrocketed in certain markets. Being aware of the market trends in your area is essential. Knowing the real estate forecast for the next 5 years will help you make a sound investment when buying a home. There are certain factors that serve as indicators of what increases home values in different areas.
4 Key Real Estate Trends
1. The Path of Progress
When assessing markets, it is important to not only know broad housing market trends happening across the U.S., but also to know which regional markets are in the path of progress. For instance, a rundown area near downtown might one day become a vibrant economic hub with skyrocketing home values. This is known in real estate parlance as being in the path of progress. Many cities and towns have revitalization programs with funding to improve the economic conditions and infrastructure of an area, making it once again highly desirable.
2. Home Value Fluctuations
Dave Ramsey is known as a personal finance guru, but he also is knowledgeable about real estate trends. One important trend he notes is that on average, real estate prices went up an astounding 10% from 2017 to early 2018. Many home buyers were priced out of the market during this time.
From mid-2018 to the present, however, the prices have stabilized and the increase in prices has slowed. If you waited to buy based on this trend, you at least have a bit of breathing room to take your time looking around. Hopefully, now you won't feel pressured to buy quickly because prices keep going up. It is also important to know what local factors are impacting home values, in addition to broad market trends. Knowing what affects the value of a house can be helpful in finding the home that is right for you at a good price.
3. Mortgage Interest Rates
Another key trend to watch is interest rates. Mortgage interest rates have been low for a number of years, and while the feds have toyed with raising the rates on occasion, overall, they have remained relatively low. These still-low interest rates favor a robust housing market. However, interest rates are predicted to rise in the future, which will affect home buyers' ability to afford new home mortgages. Therefore, buyers may be motivated to buy sooner rather than later to get into the market before interest rates go up.
4. Millennial Home Buyers
In the coming years, millennials will claim the biggest market share of home purchases at 45%. This astounding number comes with a few unique quirks of the millennial housing market. Millennials care more about quality than quantity, so they will be more attracted to homes in walkable areas with trendy décor and unique character features rather than large square footage suburban homes. They will prefer having smart homes with high-tech appliances. Green or environmentally friendly features will also be a priority. For millennial home buyers, this might mean increasing prices and competition for homes that have these desirable features.
While all of these trends can be influential to buyers, it is important to note that no one can predict with true accuracy what future home buying trends will be. Understanding what increases home value can help you avoid houses that have inflated prices and buy something that is priced correctly at a good value. This will make your home purchase a good investment now and in the years to come.
HomeFinder is an essential resource for helping you make the right decision when purchasing a home.