Recovery was the banner trend for real estate this year. Making a slow comeback after years of downturns, the market had a strong showing in 2017. Home Qualified’s Ralph DiBugnara is here with a forecast for 2018 real estate trends and tips on how to stay on top.
Interest rates will stay low
Low interest rates are predicted to maintain themselves through the following years. Threat to the rate via market factors are minimal. In addition, we may be entering into a lower rate market becoming the norm. Bankrate reports the average rate on a 30-year-fixed mortgage is about 3.85%. Falling below last year’s rate of 4%, this figure is a symbol of a continuing trend.
It’s still a sellers market
Bidding wars and limited options will continue to define the real estate market in the coming year. Low inventory coupled with a large quantity of buyers means options are limited and pricing optimum for sellers. Furthermore, a cache of buyers are standing at the ready to pounce on inventory as it comes to market. Echoing this sentiment is Burke Smith, chief strategy officer for Realty ONE Group. “The number of new homes for sale has started to increase. 2018 buyers won’t receive a break from inflated home prices in the early part of the year due to the overall inventory shortage. As in 2017, there will be too many buyers for too few listings.”
Millennials are getting older but still are a key for real estate
Finally, the predictions regarding the buying power of millennials in the real estate market will be realized. Realtor.com projects that 43 percent of home buyers in 2018 will be millennials. Because the bulk of millennial are expected to turn 30 by 2020, we will continue to see a rise in home buying among this demographic. Further from student debt and closer to home ownership, millennials will continue to make their mark o the market. Rising rent, particularly in gentrified areas, will see more millennials expanding their search areas.
Millennials are expected to widen their real estate scope and buy homes in more affordable neighborhoods. Javier Vivas of realtor.com maintains, “Millennials are a driving force in today’s housing market, they already dominate lower price home mortgage and are getting close to overtaking older generations for mid- and upper-tier mortgages. While financially secure in general, their debt to income ratios have started to increase as they compete for higher priced homes.”
Contact Home Qualified today with questions about how, where and why to buy.