Reprinted from Homes.com
Every season, the housing market trends seem to change. As we enter the fall season, what can you expect to happen to the real estate market? How are prices going to be affected by the presidential election? What will potential buyers want to know?
Here are 7 trends in housing to look for in the next few months:
MORTGAGE RATES WILL START CLIMBING
Mortgage rates have been low for a while now, but that is looking to change as we enter the fall season. The areas that will be hit most by this shift will be those with higher home prices.
THE MARKET WILL MAKE A GRADUAL RETURN TO NORMAL
For more than 15 years, the real estate market has been in a serious state of flux. The deeper we head into 2016, the more “normal” and balanced it will become. This means that new home construction and distressed sales will trend closer to their historic levels than they have for years.
MILLENNIALS WILL DRIVE THE FALL MARKET
The fall traditionally sees a slowdown of sales, but in 2016, Millennials will finally start making a difference as more and more of them start buying their first homes. You can also expect financially-recovering Generation Xers and aging Baby Boomers to also make a big impact in the home buying field this fall.
NEW HOME BUILDERS WILL START CATERING TO ENTRY-LEVEL BUYERS
New home builders have traditionally produced larger and more affluent homes for the luxury home buyer, but higher home prices and land costs coupled with a reduction in labor forces has forced builders to start focusing on producing more affordable homes for the entry-level buyer sect.
RENT RATES TO CONTINUE TO CLIMB
Rent rates are climbing at a much faster pace than home prices. This is a trend that started in 2015 and it will be remaining steady through the fall of 2016 and beyond, as American households simply lack the creditworthiness, savings, and stable income that’s required by lenders to qualify for a mortgage these days.
INVENTORY WILL REMAIN LIGHT
At the end of the summer, there were very few homes available for sale on the market compared to what’s normal for the “traditional” summer season. At the end of August, there were just 2.29 million homes on the market. That’s approximately 5.2 months’ worth of home sales. This is down by nearly 2% from August 2014. And this trend is going to continue into fall.
FEWER CASH BUYERS WILL COMPETE IN THE MARKET
In the fall, you can expect cash buyers, or those who are buying homes for investment purposes, to start bowing out of the market. The reason is because the number of foreclosed homes is starting to drop. This will enable those looking to buy homes to do so with much less competition.