2017 is bringing in a gust of fresh ideas, uncertainty, and new possibilities. The housing market is no exception to this. With record-low mortgage rates in 2016, the market saw a prosperous year with even higher expectation for 2017. Forecasters predict that millennials and baby-boomers will be the largest two age groups looking to purchase in 2017, and with that comes a slew of trend predictions.
More jobs are being created for workers ages 25-34 than any other age group. STEM centered careers which are primarily occupied by this age group are not only eliminating labor jobs but did not even exist at the turn of the century. The oldest millennials are in their mid -30s and are beginning to settle down and buy houses. A statistic from Realtor.com reports that 61% of potential homebuyers this are under age 35. Although trends with this generation showed a high tendency to spend rather than save, research now shows that millennials are more conservative with their money than previously assumed. Two-thirds of millennials are building up savings to purchase a new home within the next two years.
Millennials are looking to pay off mortgages quickly, with 77% reporting that mortgage rates are the most important factor that they are considering when purchasing a home. This group is seeing more homebuyers select the shorter 15-year plan as opposed to the standard 30-year plan. Other major factors include having solid savings for a down payment, paying off debt, and having a steady job. As far as features of the home, millennials are looking for lots of privacy, more space indoors and out, and safe, family-friendly neighborhoods.
The parents of these millennials and baby-boomers are also on the radar for home buying. This generation spans from those just beginning to be empty-nesters to those transitioning into retirement. In both cases, baby boomers are looking to sell the homes that they raised their children in so they can start downsizing.
Due to these new faces in the home buying market and shifts in the nation’s economy, the population and price trends of housing markets across the country are beginning to shift. With a growing deficit in construction laborers, building companies must pay higher wages to compete for workers. Additionally, current immigration issues creates more uncertainty for the market with such a large immigrant population in this industry. The cost to build new homes is predicted to continue to increase throughout 2017 as well as the demand for new building projects. Both of these factors result in soaring prices nationwide.
Midsized cities such as Charleston are continuing to grow as more young families find them more appealing than larger metro areas. Top-tier economic cities such as New York, Seattle, and San Francisco do not have the infrastructure development to keep up with the population growth, making it very expensive to settle in such areas. Such growth in smaller cities is both a blessing and a curse as they also struggle to adapt to the growing populations. In cities such as Detroit, St. Louis, and Minneapolis, Midwestern millennials are opting to settle closer to home as their cities and neighborhoods become more developed and offer well-paying jobs and affordable housing.
Needless to say, those looking to buy or sell should pay careful attention to home buying trends to ensure they are getting the best value possible. Not sure where, when, or how to start? Origin SC has a staff of experienced realtors ready to assist you with all of your real estate questions, concerns, and needs. To learn more about our homeownership resources, click here.