73 percent of respondents in Trulia’s report claim that buying a new home is still part of their American Dream. Homeownership is still on the rise from previous years, especially in coastal areas, and many experts believe that the housing market will be healthy in 2018.
However, only “25 percent of respondents believe 2018 will be a better time to buy a home than 2017,” according to a report by Trulia, a real estate information company.
The report states that only 10 percent of respondents are planning to buy a new home this year. However, silver linings exist, as outlined by Ryan Homes at Brunswick Crossing:
Home prices continue to rise. While this may seem like an unfortunate trend, especially to first-time home buyers, a positive and steady increase is good.
“After the housing market crash that started in 2008, we’ve seen a steady climb, with some markets rising faster than others,” according to a Forbes article that used information from the 2017 Unison Investment Management report by Unison Home Ownership Investors.
“Over the last two years, home prices have been rising about 5 to 6 percent per year on average,” according to the Case-Shiller Index.
Looking at the Index, the national growth rate in the housing market has been stable since 2011. Based on last year’s data alone, it’s likely that home prices will continue to gradually rise.
Even though about 45 percent of Trulia respondents said that rising home prices was the biggest reason for not purchasing a home, Forbes predicts a healthy national housing market for 2018.
Reconsider your desired location. Many cities (namely in the West Coast and South, including Denver; Dallas; Las Vegas; Portland, Oregon; Los Angeles; San Francisco; San Diego; and Seattle) saw a boom in economic prosperity and population growth in 2017, causing their respective housing markets to flourish.
In cities where the local economy and population remained stagnant or faltered (namely Boston; New York; Cleveland; Chicago; and Washington, D.C.) saw a standard housing market in 2017.
Trulia’s report predicts the following cities are poised for the highest housing market growth in 2018:
- Grand Rapids, Michigan
- Nashville, Tennessee
- Raleigh, North Carolina
- El Paso, Texas
- San Antonio, Texas
- Fort Worth, Texas
- Austin, Texas
- Columbus, Ohio
- Madison, Wisconsin
- Cincinnati, Ohio
This trend of economy and population will continue to affect home price growth, demand for housing, supply, and overall appreciation of a new home.
A lack of inventory may be an issue in those specific cities. According to the Forbes article, “The national home price appreciation we’ve seen has made this a challenging time for prospective home buyers in many markets, including those who already own a home.”
Many new construction homes are priced out of reach, leading many existing homeowners to opt out of “trading up”. This causes less expensive starter homes that appeal to first-time home buyers to be in short supply.
Because existing homeowners are remaining in or purchasing starter homes, first-time home buyers and renters are having a difficult time finding the right opportunity.
“First-time buyers face an especially challenging environment, with rising rents, rising home prices, and stagnant wages for many,” according to the article. “While many Millennials are approaching prime home buying age, they often [don’t] have the financial situation that would allow them to purchase a home.
The lack of inventory makes it a difficult proposition even for those [Millennials] who can theoretically afford to buy a home.”
However, according to Trulia’s report, only about 5 percent of renters claim that a limited inventory is preventing them from buying a home.
The biggest concern is saving enough for a down payment, followed by rising home prices, mortgage qualification, poor credit, and an unstable job.
Mortgage rates will rise. As one of the most common predictions of the national housing market, rising interest on mortgage rates is a result of the Federal Reserve’s efforts to tighten monetary policy and reduce its balance sheet.
This prediction is noted every year because no one knows when it’ll actually hit, especially because mortgage rates have been fairly steady since 2011. Because it’ll take years for the Federal Reserve to implement this policy, rising mortgage rates aren’t often a concern for soon-to-be homeowners.
Rely on your individual circumstances. No one can predict the future or say without flexibility that this is the perfect year to buy a new home. However, you should base your buying decision on individual circumstances.
Do you have good credit? Are you able to submit a comfortable down payment? Are you expanding your family? Are you financially prepared for the long-term commitment? Are you relocating for your career?
If all signs point to now being the time to purchase a new home, your best bet is an equity-building, fully amenitzed community like Brunswick Crossing. If you’re ready to buy a new Ryan home in Brunswick Crossing, download our checklist by clicking below: