2019 saw a significant price increase of median home up to the staggering $316,000. Economic status of people have played some major impact on the US real estate as well. Of course, you can’t face 2020 without knowing the latest real estate trends to watch out for. Knowing these trends would give you a good leverage when buying or selling a home, or keep yourself updated for future plans on the next years.
What Real Estate Trends Significantly Play Roles this 2020
Basically, there are three major trends 2020 has to offer. It circles on home price increase, relatively lower mortgage interest and the still continuous rise of millennial’s in the market.
Home Price Increase
It’s slow, but it’s happening. Property prices is on a steady increase on a 2.8% rate, according to real estate experts. That’s lower than last year’s 3.3%, and 5% in 2018. This means buyers must be careful in knowing what home they can afford.
On the other hand, sellers may rake more profit this year. However, be careful in pricing your home to avoid big loss. Talk with your realtor for knowing the best price tag.
Interest Rate Decrease
2019 have shown less than 4% interest rates for common mortgages. In 2020, experts expect to see around 3.7% for a 30-year mortgage, and 3.2% for a 15-year option.
This would lure people to actually buy a property this year, which is great for sellers. Buyers, however, must be wise in dealing with mortgages to avoid inconvenience and harmful expenses.
More Millennial Buyers on the Market
Those people who are excited to take selfies with their new home? They still dominate the real estate market in 2020.
According to NAHB’s latest Housing Trends Report, the share of adults who are considering purchasing a home in the next 12 months fell to 11% in the final quarter of 2019, down from 13% a year earlier. This decline marks the fifth consecutive year-over-year drop in the share of American adults planning to buy a home in the year ahead, a trend likely spurred by the low levels of housing inventory available in the market.
An important development in the fourth quarter of 2019, however, is that a significantly larger share of prospective home buyers are first-time buyers (63%) than the comparable figure a year earlier (53%). Future polls will determine if first-time buyers will continue to grow as a share of all those looking to buy a home.
Millennials are the most likely generation to be making plans to purchase a home within a year (19%), followed by Gen Z (13%) and Gen X (12%). In contrast, only 5% of Boomers reported plans to purchase a home. Geographically, 12% of respondents in the South and West are prospective home buyers, slightly ahead of the Northeast (10%) and Midwest (9%).
Prospective buyers in the youngest two generations are primarily first-time buyers: 88% of Gen Z buyers and 78% of millennial buyers are reaching out to homeownership for the first time in their lives. The share is much smaller (although still a majority) among Gen X buyers (57%) and significantly less likely among Boomers (20%). More than 60% of prospective buyers in every region are buying a home for the first time.
In terms of the type of home these prospective home buyers are interested in, 40% are looking to buy an existing home and 19% a newly-built home. The remaining 41% would buy either a new or existing home.
Whether you’re a seller, buyer or somebody who wants to keep an eye on the market, these real estate trends are certainly significant for you this year. Consult with a real estate professional for more detailed info and explanation about these trends today.
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