For those homeowners, who are listing their real estate during spring this year, strongly believes that they will be able to get benefited with a favorable housing market scenario. As a buyer or seller of real estate, you must need to know is listed below the latest trends happening in the real estate market.
Homes have become less affordable
With drastic increase in the home prices, persistently far more than wages, it becomes difficult for an average American to pay for a home. An average income gainer during the first quarter of this year is expected to spend nearly 30% of his total income against mortgage payments.
These prices have gone drastically up, which was 26% during last year and 22% during 2012, according to research done by RealtyTrac. Added, it will be tougher time for the average wage earner to afford for homes as it will further increase.
Still, it looks attractive to go with buying a home rather than renting cost today. Rental cost has risen to an extent; a buyer can save money by buying a property within 2 years compared to renting almost in 70% of the U.S housing market.
Mortgages are quite easy to get
Those days of stringent underwriting standards, crazy low-ball appraisals deals have gone. In a recent trend, purchase loan applications are processed in quick turnover with relaxation in the standards. Buyers who have less potential of down payment are also getting mortgage loans easily.
Large institutional investors are out
For the past few years, large institutional investors have shown keen interest in purchasing, which got gradually reduced due to the rising real estate prices. Still, they are not ready to sell their property and prefer to stay as landlords to enjoy the high rents. On the other hand, mom-and-pop investors are also started venturing into the real estate market, as landlord for single-family home or vacation rentals as they can find it as a good investment.
Less competence by all-cash buyers
According to a report from CoreLogic, only just one third of home sales were made by cash buyers during last year, which is the least level since 2008. In January 2011, cash sales were at peak up to 47% and that has been trending down since then. It is expected to fall down to a historic average of 25% by the middle of the forthcoming year.
Tight Inventory supply
With the rising home prices are forcing most home sellers to list their properties, inventory is still in high demand, especially for starter homes. It’s because the lesser count of distressed properties is listed for sale. It was around 650,000 newly single-family homes were built last year, which is the highest count since 2008 but that is far lower the historical average.
Demand for Townhouses
Both among boomers and first-time buyers, there was a high demand for high-density real estate property like townhouses. Over 2014, the number of townhouses builds was increased by 18% this year, out of which only 12% comprise all new home construction as per the National Association of Home Builders.
Rising rates aren’t scaring buyers
After many years of suspicions, that raising rate that affects housing markets, the nation has transformed at such a glacial pace that the housing market has stabled itself and buyers are potential to face the rate increases, particularly ones that happen gradually.
Peaked hottest housing markets
Based upon our study from housing crisis a decade ago, prolonged double-digit growth in home prices is not sustainable.
After multiple years of such development, the U.S booming markets like San Francisco and Boston finally are leveling off. This time, there is no much concern about the bubble, since most of the buyers either make a purchase with cash or carefully vetted loans.
Rapidly selling good homes
According to Trulia report, 1/3rd of the properties are sold out within 30 days of their listing. Starter homes are witnessed with a big uptick in cost and moving fast, that makes first-time buyers to face issue to withhold a position in the market.
The suburbs are staging a return
According to the Bank of America Homebuyer Insights report, with the rise in both the cost of buying and renting of a home in urban regions, buyers search extended to the suburbs, especially for a single-family home , provided, the buyer’s emphasis on city-like facilities like public transportation and downtowns in these suburbs. In a recent trend, buyers are ready to give up importance for home size and ready to occupy denser communities, in order to reduce the commute time.