According to an article posted on realtormag.com, 2015 was quite possibly the best year for real estate since 2007. It is projected that the housing market will continue to expand and might even see even better results in 2016. What’s next for the housing market? One of the fundamental forces leading to this expansion in 2016 is the prediction that the job market will continue to develop, allowing consumers to save money and permit them to buy their first home or move to another one. Here are the 5 trends:
A RETURN TO NORMALCY
Jonathan Smoke,realtor.com’s chief economist, states, “We’ve survived 15 years of really irregular patterns, and subsequent to working off the staggering impacts of the lodging bust, we’re at long last seeing indications of more typical conditions.” There will be a steady and sound development in the sale and prices of homes in the coming year. Sales and new construction are due to return to previously recorded levels.
THE MILLENNIAL MARKET
Millennials deliantaed almost 2 billion deals in 2015 – 33% of home purchasers. It is expected that millennials will play a large role as first-time home buyers in 2016, with many “financially recovered” Generation-Xers and newly retired baby boomers following suit. Smokes states, “Since most of these people are already homeowners, they’ll play a double role, boosting the market as both sellers and buyers,Gen Xers are in their prime earning years and thus able to relocate to better neighborhoods for their families. Older boomers are approaching (or already in) retirement and seeking to downsize and lock in a lower cost of living.”
Manufacturers have been confronted with higher area costs, restricted work, and worries about the interest of the market at the entry level. All things considered, they have moved to developing more expensive homes, which has created new-home costs to rise essentially speedier than existing-home costs. In 2016, they likely will move to more moderate products in order to meet the needs of “entry-level buyers”.
MORTGAGE RATES WILL INCREASE
Mortgage rates will probably be unstable in 2016. Be that as it may, the latest move by the Federal Reserve to guide loan fees higher ought to push contract rates higher in the new year than the recorded lows they have been at for a considerable length of time. Smoke states,“That level of increase is manageable, as consumers will have multiple tactics to mitigate some of that increase. However, higher rates will drive monthly payments higher, and, along with that, debt-to-income ratios will also go higher.”
INCREASE IN RENT
Rental expenses are soaring, and the expenses are liable to just go up in the new year.“Rents are accelerating at a more rapid pace than home prices, which are moderating,” Smoke says. “Because of this, it is more affordable to buy in more than three-quarters of the U.S. However, for the majority of renting households, buying is not a near-term option due to poor household credit scores, limited savings, and lack of documentable stable income of the kind necessary to qualify for a mortgage today.