2016 will continue to see the climb in home sales and prices of the past few years, albeit not as rapid. But homebuyers should not see this slow down as a sign of a faltering market; it’s simply the market nearing its return to normalcy. 2016 will no doubt continue to be a fantastic year to buy a home, but with less distressed homes on the market and employment rates stabilizing, what home buying trends will we see in 2016?
Millennials buying Generation Xers’ homes will be driving a healthy market
In 2015, Millennials invaded the real estate market, making up over one-third of home sales. In 2016, they will continue to buy and increase their market presence even more. Millennials will make up the bulk of first-time home buyers. And whose homes are they buying? Generation Xers’ homes. With each year, Generation Xers are financially recovering more and more from the late 2000s recession. Now in their prime earning years, they’ll be selling their first homes to eager Millennials and buying their second homes in more affluent neighborhoods.
Home sellers will continue to see positive gains in home values
Home values will continue to rise just as they had in 2015. In 2016, they could finally return to the prices seen during the housing bubble. Due to regulatory changes and more discerning lenders, people are able to get into the homes they can afford. Now that home buyers are benefitting from improving employment opportunities and continuing low mortgage rates (still at or under 4% for now), people are eager to buy again. That is great news for home sellers because inventory hasn’t quite caught up with demand, driving up their home’s value. 2016 will once again be an outstanding year to buy and, especially, sell.
Already high rents will get higher, continuing to make buying a better option
Right now, rents are exceeding 30% of incomes in most of the nation. And since they will continue to rise in 2016 at a level that outpaces both wage increases and home prices, renting will continue to be a poorer choice than buying.
The internet will continue to grow as the place first-time homebuyers begin their search
In the 25-44 age bracket, 88% of homebuyers utilized a real estate agent and 94% also utilized the internet in their home search. Millennials grew up with the internet, and as they continue to become major players in the real estate market, the internet will become even more vital for home sellers in 2016. That makes it important to choose a real estate agent who not only has expertise preparing your home for in-person selling but has the knowledge and resources to get your property on the computer screens of potential buyers as well.
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