Recognizing and predicting trends in real estate can be tricky. While some things seem obvious, sometimes there are underlying currents that aren’t so obvious. Of course, sellers want the best prices for their homes, and buyers want a good value for their investment. That being said, here are some trends we’re keeping an eye on for 2016 here at Hillsdale.
Interest rates are going up. In December, the Federal Reserve raised key interest rates for the first time in nine years. All indications are these rates will go up at least one more time in 2016. As a result, mortgage rates will increase as well, but they have been at historic lows for quite some time. The rise in mortgage interest rates may go to the 4.5% range, which is still fairly low.
Since 2008, wages have been very stagnant. If that trend continues, sellers may have to consider different pricing models if they need to sell a property quickly. In other words, it’s going to be a “buyer’s market,” unless wages begin to measurably rise.
More Millennials want to buy homes, according to Trulia.com. Just 65% of millennial-aged borrowers (ages 18 to 34) wanted to own a home in 2011, according to the real estate group, but now that number increased to 80% in2015, up from 78% in 2014. And one-third of those will want to buy in the next two years, Trulia says.
Millennials are proving to be rather savvy with their money. They saw their parents struggle with debt through the Great Recession, and they are dialed in on what to do – and what not to do – when it comes to their finances.
Suburbs Are Popular
Looking at home buyer preferences, Trulia.com reports that contrary to popular belief, “Millennials would prefer to own a home in the suburbs rather than rent in a city.” One reason is rents are skyrocketing, so mortgage payments are becoming more attractive.
As for what home buyers are seeking, the more modern the amenities are in the home, the more attractive it is to more people. Many young home buyers are sinking their money into to their down payments, and there isn’t much left for updating. Open floor plans, home offices, energy efficiency, and low maintenance are key points on the top of many buyers’ lists.
The bottom line for 2016 is there are many positive signs for both home buyers and home sellers. The market is better than it has been since the recession began almost 10 years ago. If you’re interested in buying or selling your home in Davie County or Western Forsyth County, discover how the Hillsdale Real Estate Group will make a positive difference in your next move. Call 336-998-1967 to learn more.