2018 in the real estate field started well and started tapering as of mid-year. Many Americans still sold their homes. They ushered in 2019 from their newly purchased homes. Whether you intend to buy or sell your home, here are some real estate trends you need to know.
Home Prices Are Slowly Rising, and Have Less Offers
It is common knowledge that in 2017 and at the beginning of 2018, home prices leapt by 10%. In 2019, home prices were estimated to rise, but at a slower pace, with the number of homes listed for sale increasing by a paltry 1%. The reason for this is partly due to an uncertain economy and rising mortgage rates. This combination is a factor that discourages most buyers who are undecided about a home purchase.
Even with these real estate trends, there were willing homebuyers, with most of them interested in buying new homes. Home construction is expected to increase by 8% this year. The only problem is that in most places, there are not newly built houses to fulfill the demand, and construction companies do not have enough workforce build enough homes. The result of this trend is that the available new homes will go for higher prices. For sellers, this means better profits, and for sellers, it means digging deeper into their pockets.
Mortgage Interest Rates are Rising
After years of standstill, mortgage interest rates are rising. The rates are expected to rise to a median of 5% for a mortgage of 30 years, and 4.4% for a 15-year long mortgage. The last time mortgages were this high was seven years ago. To stabilize the rising inflation and the economy, the Federal Reserve hiked short-term interest rates. The interest rate increase means that a lot more people have the sending power and are willing to borrow.
In 2019, real estate trends was a bit different as sellers and buyers adapt to the changes. If your house is on the market, be prepared to receive fewer offers as a mortgage is a significant investment, and higher interest rates make buyers think twice. For buyers, if you are buying via a mortgage, take a 15-year fixed-rate mortgage, which you will be sure to pay over the loan’s lifetime.
Most Homebuyers are Millennials
The new homeowners are now Millennials, who are the ones with stable careers and the buying power. The average Millennial’s income is $88,200, and they are interested in purchasing their first homes, preference being in middle and upper-middle-class areas. This real estate trends work out well as the baby boomers are going into retirement, and eventual downsizing. In 2019, Millennials will have the most mortgages, taking a 45% chunk of the market. Generation Xers will receive 37% and baby boomers a mere 17%.
If you are selling, remember millennials are more tech-savvy than ever and will do some research before purchasing. They will do some online shopping, so invest in high-quality internet photos, and ensure you declutter the house, as they are more into the quality of space available. The location is also important to millennials, as is a low-maintenance lifestyle. They achieve this lifestyle by buying energy-efficient homes. If your home is not any of these, they will move on to the next home, or offer less money so that they can upgrade your house after purchase. For a buyer, expect lots of competition on the market, but knowing what you want, and hiring an experienced real estate agent will help in the purchasing process.
If you are property hunting in New Jersey and want to get the best out of the purchasing process, you can call us at 201.568.5668 or email Josh@NJLux.com today!
