A Look at The Top Real Estate Predictions for 2016
To say the housing marketing has seen a few ups and downs over the past decade would certainly be understatement at best. However, most real estate markets across the US have been strong and stable for the past couple of years with steady appreciation and low inventory in most major US cities. What will 2016 hold though? We will see a slowdown and can the momentum continue?
Our top real estate predictions for 2016 are exciting and promising. The market is growing, unemployment is down, new home buyers are more confident, and a populous Millennial generation is coming into their own. Those looking to purchase a new home for themselves or even an investment property are sure to be excited by what this year has to offer.
Rental Prices Rising
If you ever needed a reason to get out of your old rental and into new construction, this will be sure to hurry you along. According to a report by Rent.com, a majority of property managers—68%, to be exact—are planning to raise their rental rates in 2016. Because of the low vacancies in many apartment complexes and the overwhelming surge in population, managers are able to increase prices without seeing a loss in available tenants. It would be wise to take this time to look into a true investment with a new home rather than continue to throw your money away on an expensive rental this year.
Low Price to Build
To go along with the economical prospect of buying rather than renting, construction for new homes has never been more affordable. New buyers are flooding the market and local home builders are happy to meet the increasing demand, trending towards more affordable construction and home prices.
Representing one-third of the current home buying population, Millennials are on the rise and a force to be reckoned with. Builders must meet their budget or be able to survive without their business. The price of homes and construction must either adapt to the current market or grind to a halt.
Mortgage Rates Skyrocketing
The Federal Reserve notes that 2016 will begin an era with mortgages that have a higher interest rate than in the past. This is caused partially by the previous years of low interest rates that were bound to rise to meet the market. Those most affected will include markets with high prices and amenities, which are facing a 60-point increase in a 30-year-fixed-rate mortgage, which is huge compared to 2015.
A Generation Retires
Baby Boomers are the largest demographic behind Millennials, and they will make a big change in the housing market this year. Retirement looms in the present and near future for this group, and many will be looking to relocate to a different place to live out the rest of their lives. Larger family homes will be up for sale, and this generation is likely to seek out smaller abodes often in areas of the U.S. with warmer climates.
Home Sales Growth
According to the World Property Journal, “home prices will likely rise at a quicker rate than inflation, but not the same rate as last year.” This can be attributed to the lowering rate of unemployment and a rise in national financial security. The economy is improving, and more and more people are able to afford buying a house. The increase in sales this year is expected to hit 4-5% more than in 2015, which is a large change.
All in all, 2016 is shaping up to be a great year if you are in the market to purchase or sell your home. Take advantage of this opportunity to buy or build your dream home today!