While no one can say for certain what 2018 holds, experts appear to be conjuring up the idea of the perfect housing market storm. Between projected inventory shortages, rising costs of urban living, and rising home prices, the true heroes in the housing market will be homes that are affordable, both for lower income home buyers and the up and coming generation of Millennials.
Collectively, it’s looking like 2018 will be a trying time for first-time home buyers. Why? Basically this assessment comes from a compilation of several main projections for the real estate industry this year from Inman.
Real Estate Industry Projections for 2018
2018 will be a classic “supply and demand,” story, meaning that the amount of people looking to buy homes will exceed the amount of homes currently, and coming on to, the market. In return, this demand will lead to an overall increase in home cost. Those who will have the upper-hand in this market will be those who have recently sold a home and made a profit. They will be the frontrunners in home purchases, not the younger, first-time-home-buying demographic.
Rising Cost of Urban Living
Millennials have largely preferred urban living, but due to soaring housing costs, many are moving to more affordable homes in the suburbs.
Remodeling Will be Popular Option
With affordable housing on the outs, more people will be spending the money to renovate or remodel, rather than searching for a new abode. This in turn contributes to the low inventory issue. More people are turning to making their home “look and feel like new,” rather than go through the hassle of selling and purchasing a new home.
Entry-Level Homes Will be Focus for Builders
It’s projected that 2018 will finally be the year that builders listen to the outcry from those looking for affordable housing options. Rather than focus on high-end and luxury housing options, builders are projected to focus on creating more starter homes.
Rising Mortgage Rates
According to a recent Inman article, 30-year-fixed mortgages could rise from the current average of 3.9% to somewhere below 5%, with some forecasting the average around 4.5%.
Based on the projection, affordable housing will be highly sought after and while builders will be bringing some new options to the market, the supply will remain lower than demand. What's your plan for generating buyer leads in the New Year?