Finding the perfect home can be tough, especially if there aren’t many homes for sale. That’s why inventory is such a hot topic these days. There’s been a shortage of available homes over the past few years and it’s made buying a house more difficult, especially in the lower price ranges. However, recent numbers from Zillow show that conditions are beginning to swing back in favor of home buyers. Inventory has been rising, and at a good pace in the markets that need it most. In fact, in some of the nation’s most competitive markets like San Jose, Seattle, Denver, Los Angeles, and San Diego, the number of homes for sale has seen double-digit increases year-over-year. This is undoubtedly good news for home shoppers, as it gives them more options and therefore better chances at finding the right house. However, because the previous years’ inventory declines were significant, it’ll take some time to reverse those losses. Home buyers can still expect a competitive market this year, though it’s finally trending in their direction. More here.
While real estate is slowing down nationally, there are still many markets out there that are heating up. Housing is highly dependent on location, and in these locations across the country, price is appreciating. This could make them a good investment in the long run. https://www.realtor.com/news/trends/2019-housing-markets-poised-to-take-off/
A new report from HousingWire shows that homeownership among Americans between the ages of 28 and 31 jumped from 27 percent to 47 percent just two years. Home buying has surged among younger Americans, and that’s an encouraging sign for the housing market – especially since homeownership levels haven’t yet fully recovered from the housing crash. However, that’s not the whole story. Increasing demand from first-time home buyers could also put pressure on home prices if available inventory can’t keep up with the level of demand. Millennials are expected to buy 10 million homes over the next decade, and they will be competing with each other. The balance between new home buyers and new homes will be a key component of the real estate market. If supply continues to lag behind, home prices will keep rising, which will build equity among current homeowners. However, that could cause affordability issues for aspiring homeowners. On the other hand, if supply increases, prices should moderate and lead to booming home sales. Either way, first-time home buyers will have a significant effect on the housing market in the coming years. https://www.housingwire.com/articles/47785-this-is-where-millennials-are-buying-the-most-homes?utm_source=AKZO+Media+Subscribers&utm_campaign=6929038aa7-EMAIL_CAMPAIGN_2018_12_27_07_54&utm_medium=email&utm_term=0_134f701abc-6929038aa7-276542805
Though rent is up about 3 percent from last year, it isn’t increasing quite as rapidly as it was before. There may be evidence that the slowdown is helping aspiring first time home buyers to save money for a house – especially millennials, who make up half of all renters. For one, the number of renters is falling. In fact, there were 43.2 million renter households across the country in 2018, which is about 100,000 fewer than in 2017. Combine that with the fact that millennials are currently buying more homes than any other generation, and it appears that slower rent appreciation may be helping more renters make the leap to homeownership. However, the renter’s market isn’t the same across all locations. For example, the New York metro area has seen rent rise just one percent over the past year, while in Las Vegas rent is up almost seven percent year-over-year. Still, if the overall trend holds, conditions may be getting easier for renters who hope to buy a home in the near future. https://www.prnewswire.com/news-releases/us-renters-spent-504-billion-on-housing-in-2018-300770096.html?utm_source=AKZO+Media+Subscribers&utm_campaign=0d06134231-EMAIL_CAMPAIGN_2018_12_21_07_27&utm_medium=email&utm_term=0_134f701abc-0d06134231-276542805
New numbers from the National Association of Realtors show that sales of previously owned homes fell 1.2 percent in January from the month before. It was the third consecutive monthly decline. Among the country’s four major regions, only the Northeast saw an increase in sales activity. In addition to rising inventory, home price increases were the slowest in six years and homes were on the market for an average of 49 days. This is longer than it was at the same time last year, when most listed homes were selling in just 42 days. Essentially, spring home buyers may find buying conditions to be more favorable than expected. NAR President, John Smaby, said that slower sales is good news for home buyers. Decelerated sales and increases in inventory will work in favor of potential home buyers, putting them in a better negotiating position heading into the spring months.
A recent survey by Zillow asked 100 real estate economists and experts for their housing market predictions. Though they had varied views on topics like mortgage rates and home values, they almost unanimously agreed on one thing: homeownership A full 88 percent of responding panelists said that they expect the homeownership rate will be higher in five years than it is now and an almost equal amount said it will be improved in just two years. Why is this important? Following the foreclosure crisis and housing crash, the homeownership rate – which had peaked in 2006 – began to fall. And while it fell just 6 percent from its high, and only 2 percent from its historical average, it was a reflection of growing uncertainty among Americans. Buying a house, which had traditionally been seen as part of achieving the American dream, had lost some of its appeal. Since then, however, both the homeownership rate and housing market confidence have begun to rebound. According to the survey, an influx of first-time home buyers over the next five years will help further improvement. More here.
For many years following the housing crash, home buying conditions were excellent. Home prices had plummeted and mortgage rates were at historic lows. It was a home buyer’s market and a good deal for anyone who could take advantage. However, since prices had fallen so far, many homeowners who wanted to make a move would have to sell their house for less than they paid for it. But these days, those same homeowners have seen their home’s value rebound and maybe even exceed what it was before the crash. That means, though buying conditions aren’t what they were then, conditions have improved significantly for homeowners who are looking to sell. According to Fannie Mae’s monthly Home Purchase Sentiment Index – which measures Americans’ feelings about the housing market, economy, and their personal financial situation – survey respondents have noticed. The most recent results show an increase in the number of respondents who said it was a good time to sell. The flip side, of course, is that a decreasing number said it was a good time to buy. More here.
There are many reasons someone might want to shop for a home outside of their immediate neighborhood, including a new job opportunity or retirement. But where are the most popular destination for out-of-state movers? According to United Van Lines 42ndAnnual National Movers Study, Vermont is the state with the highest percentage of inbound moves. Though the Northeastern state leads the list, most of the states seeing a high percentage of out-of-state migration are in the South and West. States like Oregon, North Carolina, Nevada, Washington, South Dakota, and Arizona are attracting more Americans than locations in the Midwest and Northeast. Michael Stoll, an economist and professor in the Department of Public Policy at the University of California, Los Angeles, says there are reasons these places are more popular. “The data collected by United Van Lines aligns with longer-term migration patterns to southern and western states, trends driven by factors like job growth, lower costs of living, state budgetary challenges, and more temperate climates.” More here.
When shopping for something, having more to choose from is generally a good thing. This is especially true for homes. Not only do home buyers have more options, but prices stay at a reasonable level. When there are enough homes to meet demand from interested home buyers, prices moderate. However, over the past few years, available housing inventory has been lower than normal in most markets. At this time last year, inventory was down 9.1 percent on an annual basis, according to new data by Zillow. Because of this, home values have been increasing. That may be starting to change, however. The number of homes for sale has now increased year-over-year for three consecutive months. Although the most recent improvement was only 0.4 percent, it’s still a good sign for home buyers. If inventory continues to gain, even small increases could lead to more favorable affordability conditions. More here.
Real estate is about location. From neighborhood to neighborhood, conditions may differ. Pricier neighborhoods will have different dynamics than more affordable areas. Hot spots that offer home buyers features and amenities will have different conditions than less popular areas farther from the action. That’s why most people work with real estate professionals when buying or selling a home. It’s advantageous to work with someone who has expertise in the specific parts of town you’re interested in. But that’s not to say you can’t have a general sense of where the market is headed. Take the most recent forecast from Freddie Mac, for example. The outlook says, though the housing market will slow down this fall and winter, high demand for homes will mean more sales and competition next year. It also says home price growth will begin to slow next year. Overall, according to Freddie Mac’s outlook, home buyers and sellers should expect next year’s market to look relatively similar to this year’s. More here.