Toward the end of 2016, there was a slight dip in the home building market. For this year and next, however, the number of new homes being constructed in the United States is expected to rise gradually. A 10% increase was predicted for 2017, and next year an increase of 12% is anticipated.
In March 2017 alone, nearly 640,000 new home sales were reported. Home sales for this year have, in fact, come in slightly over what was projected. Good news for home builders.
Let’s take a look at some of the latest trends in real estate so that you can determine how the purchase or construction of your new home might be affected in 2017 – 2018.
Housing Market Latest Trends
- The Latest in Mortgage Rates
For the time being, mortgage rates, though traditionally unpredictable, are currently still in favor of home-buyers – some financial institutions are offering rates as low as 3.70% APR. Taking advantage of these mortgage rates while they last is a smart move for anyone buying a new home or having one constructed from the ground up. Additionally, there are programs and grants available for many first-time home-buyers. Aside from local programs and grants, any number of home-buyers in 2017 can take advantage of the following:
EEM or Energy-Efficient Mortgage
Good Neighbor Next-Door Program
United States Department Of Agriculture or USDA Loans
Federal Housing Administration or FHA Loan
Will these rates trend upward in the near future? Many predictions favor that possibility, so it may be wise to secure your new home loan sooner than later.
2. Western Metropolitan Markets
When compared to the United States overall, it is expected that western Metropolitan markets will see a 4.7% sales increase and approximately 5.8% price increase. It is strongly believed that they will dominate this year’s top housing markets.
3. A Market That Is Moving Faster
At a pace considerably quicker than the national average (11 days or 14% faster, in fact), in the top 100 metros, it takes approximately 68 days to sell a home. Though for the rest of 2017, this is not expected to alter drastically; 2018 could bring significant changes.
4. Home Prices Favor Buyers
Though nationally, home prices were forecast to appreciate by 4.9%, those forecasts have now slowed to a year-over-year growth of only 3.9%. This is good news for buyers. But because supply is still being outmatched by demand in today’s market, the pace of price appreciation could rise. An increase of 1% or greater could realistically be expected in 26 or more of the country’s largest metro areas (i.e., Baltimore, Akron, Greensboro, etc.).
5. Affordable Cities for Millennials
Already beating the national average in proportional millennial home-buyers, Midwestern cities could prove to be the most affordable for our millennials. While the financial picture may not look it’s brightest for these individuals, cities like Minneapolis, Des Moines, Omaha, Columbus, and Madison, Wisconsin are offering an affordable housing market.
6. Generations Powering the Market
During the next ten years or so, demand will likely be driven by two distinct demographic waves – baby boomers and millennials. These generations are quickly approaching a stage of life during which many will make significant home buying decisions. Millennials will soon find themselves marrying and having children; while baby boomers are retiring and becoming empty-nesters. (And let’s not forget the Gen Xers!) In 2017 alone it is thought that 33% of home buyers will be millennials.
As with any prediction, these are not set in stone. And as with most trends, they are subject to change without notice. But a well-informed home buyer will have his finger on the pulse of the real estate market to ensure the best deal on the finest new home.