With the first month of 2016 nearly finished, we thought we would take a moment this week to share with you some insight on what real estate experts believe will be big home buying trends for the remainder of the year. You can count on many of these trends to apply to us here in Plymouth, Canton, Northville, and most of southeast Michigan, as well.
The National Association of Realtors recently came out with its forecast for the big home buying trends of 2016.
So without further ado, here is that list for you!
What Home Buying Trends You Should Watch in 2016 in Canton
The housing market will return to normal, meaning healthy growth in home sales and home prices, albeit at a slower pace than in 2015. Experts say that this won’t indicate that the market is faltering but rather, just getting back to normal. This also means that distressed sales won’t make up such a big part of the market and that new construction will return to traditional levels.
2016 will be an excellent year to sell your home because of generational trends. Specifically, Millennials will continue to be a dominant force on the market, especially as first-time buyers. Those financially recovering Generation Xers will also add movement to the market as they seek to relocate to better neighborhoods for their families while older boomers will seek to downsize. All of this will create some much needed movement on the market.
Home builders will construct properties at more affordable price points. Because of higher land costs and limited labor, builders have been focused more on higher-priced housing units for customers that they know they can consistently rise upon. This has caused new-home prices to rise a lot quicker than existing home prices. While this has helped builders be profitable, it has also limited the entry level home market. This will change in 2016 as we see more home builders constructing new homes at more affordable prices.
Higher mortgage rates will impact the high-cost markets the most. Experts are expecting mortgage rates to rise and fall throughout 2016, although the overall trend is expected to be upward. Thus, thirty year fixed rates are expected to end 2016 about 60 basis points than at the beginning of the year. This will mean that those markets with the highest prices will see the highest rates and thus, fewer sales. But across the market, experts are expecting that the effect will be minimal.
Rents will go up more than home prices. As most people already know, the housing crisis has created such demands for apartments that the rates are nearly unaffordable. And that’s not expected to change in 2016. As a result, it is much more affordable to buy in more than three quarters of the country than it is to rent. The unfortunate thing is that for many households, buying might not be a near term option just because of poor household credit scores, limited savings and a lack of documentation on stable income – all of which are often necessary to buy a home.
How Can We Help You Realize Your Canton Real Estate Dreams in 2016?
We are interested to see what the future holds for the national and local housing market here in Canton. We will definitely keep you posted as more trends emerge.
For now, if you’re thinking about making this the year that you enter the housing market as either a buyer or seller, we encourage you to connect with us at Bittinger Team, REALTORS.
We would love to assist you by answering any questions you might have, providing you with valuable resources and offering you invaluable expert advice.
Until next time,
Noel
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