The real estate industry is constantly changing, and part of a real estate agent’s job is providing clients with helpful, accurate advice about the factors affecting property sales. New and experienced agents need to stay up to date on the latest trends in the real estate market as they evolve throughout the year. A sound understanding of the market is important when deciding whether to buy or sell, where to look, how to price a house, and what to offer. As 2017 winds to a close, keep an eye on these housing trends.
1. New Homes Will Cost More for Buyers
Increased labor and construction costs means buyers will be paying more for new homes. Labor shortages and tougher immigration policies are causing builders to increase their rates. Inform buyer clients considering building or buying a new property that higher costs should be considered. There will likely be a shortage of construction workers this fall due to stricter immigrant labor laws that may pass. Purchasing an existing home may be a better deal than building or buying a new house.
Although newer homes cost more, the overall trend in home construction is still positive, with a 5 percent increase in 2016. Experts suggest that new home construction will continue to increase throughout 2017.
2. Home Prices Will Increase By 3.6 Percent
Leading economists and real estate experts predict that home values will slow down compared to 2016. Home prices are only expected to increase by 3.6 percent, which is good news for buyers planning to buy this year. Owners thinking of selling may want to wait a year or two until price growth picks up again in the hopes of getting a higher price.
3. Mortgage Rates May Rise
Although the average 30-year fixed mortgage rate was under 3.75 percent during the summer, experts believe that it will stay above 4 percent. But rates are still low, making 2017 a good time to buy a home. Advise buyers to lock in a low rate before they have a chance to increase in 2018 or 2019.
Mortgage credit will also be more readily available as lending standards become more flexible and lenient. Government-owned mortgage companies will also begin to back up larger mortgages again. Read more about how to sell your home in a flash.
4. The Rise of Medium-Sized Cities
Medium-sized cities are becoming more attractive to young buyers looking for affordable homes in areas with nearly as many cultural amenities and professional opportunities as larger cities like Seattle or New York City. Expect the mid-sized city trend to carry on into the fall season.
5. Millennials Will Begin Buying Houses
For several years, millennials have avoided buying homes, perhaps due to a lack of employment opportunities, stability, and a down payment. But now adults under 35 are ready to buy, making up 61 percent of first-time home buyers in 2016. Experts recommend that buyers file income taxes early because lenders will need to see the latest information. Advise buyer clients to save money for a down payment and the closing costs. It’s also necessary to find an experienced loan officer who can introduce buyers to different loan and down payment assistance programs.
Real estate consumers expect agents to be well informed about the latest real estate industry news and market trends. Important factors can change over the span of a few months, so it’s important to constantly stay up to date. By understanding what to expect, you can effectively prepare your clients for the home buying or selling process.