How the Real Estate Market Has Changed

With buyer traffic increasing for the most part, pretty steadily since 2009, you are facing some serious competition and low supply if you are in the market for a new house. Although the number of single-family new construction homes has not reached pre-recession levels, the number of new homes being built is steadily on the rise and will continue to rise.

Stunning new home in Berryville

According to studies done, nearly 80% of millennial homebuyers believe that owning a home has a positive impact on their long-term financial goals. Millennials are one of the biggest buying forces powering the home buying market. According to NAR’s 2017 Home Buyer and Seller Generational Trends study, Millennials were the largest group of home buyers (34 percent) for the fourth consecutive year.

Millennials are late bloomers. They’ve delayed marriage, having children, and buying a house. When they do buy, they want a bigger home. Sometimes, they skip that starter home and look for a house that they plan to live in forever.

The market is currently a sellers’ market. There is high demand and a small number of homes for sale. This is helping the new construction market surge. Builders are helping to backfill the demand that is out there. Buyers are looking for the best investment for their new home purchase, and with so many first-time home buyers in the market, competition is fierce.

How the real estate Market has changed graph

According to the NAHB (National Association of Home Builders) Single-family production of new homes is expected to continue to rise in 2018. They are expecting about a 12% increase over 2017, while residential remodeling is only expected to rise about 1-2%. They are expecting a continued surge in new home construction, as we have seen over the past couple of years.

One of the biggest issues we will continue to face in the housing market in 2018 is going to be affordability. With a stronger economy people have higher wages and job growth is rising. Mortgage rates are on the rise as well.  Mix this all up with a low supply and a high demand for housing and you will see prices going up. If price gains are too high and start growing past the 5% mark it will not be sustainable. This will cause the housing market to move from its current healthy growth to a neutral growth.

Builders will continue to build, homeowners will continue to sell, and buyers will continue to buy.  2018 is starting out promising and is looking to stay that way.