The housing market has changed in different ways over the years. Not only has the homebuying process shifted towards a more virtual approach with people looking for homes online, but the value of the market, along with selling rates changed too. If you are currently searching for a new house in the U.S., you might be eager to know the latest trends and statistics of the housing market. Here are some facts that might interest you and help you to make a lucrative real estate investment.
Annual Home Values Are Growing
Home values are still increasing yearly, and it seems they will not go down anytime soon – mainly because fewer homes are available for purchase while more people are looking for a new property.
In August 2022, the active listing national median home price rose by 14.3%, reaching $435,000. At the same time, the rate is lower than the 16% yearly growth the market had back in June and July. So, people are hoping the price increase will at least slow down.
Housing Shortage
In July 2021, there were 1,391,000 freshly built houses. Compared to the same period in the previous year, this brought an extra 51,000 homes to the market. Even in 2022, there is a shortage of houses in the market. For some time, the number of homes available has decreased, with more individuals eager to become homeowners.
This situation worsened in 2020. According to Ofirio charts, most houses in Florida were built before 2010, and the median year built is 1997, proving that the number of new houses being built is low.
In August 2022, there were 600,000 fewer houses available compared to August 2017-2019. As such, the market had 40% fewer property listings available. The good news is that while the availability of houses is low at the moment, it’s starting to grow. In July 2022, there was a 30.7% boom.
Due to the scarce home inventory, homebuyers need to put more effort into hunting for houses, as the best offers are taken much faster than before. They have to look in different locations and give up on some of the features they want when it comes to the house or neighborhood.
Mortgage Sales Don’t Indicate that They Are Going to Decrease
It’s worth noting that mortgage rates will keep rising. However, mortgage rates might also start to decrease if the economy weakens and inflation starts calming down. However, through the end of the year, the rates will keep growing, and we might see 30-year rates going as far as 8.5%.
For 15-year fixed-rate mortgages, rates increased by 2.66% in January. Then, by August, they had already reached 4.56%. At the same time, 30-year fixed-rate mortgage rates went straight to 5.22% in August of this year.
Millennials Are More Interested in Homeownership
The millennial population is very large. These people have begun entering the housing market, but the opinions on this matter are mixed. Some believe that the housing demand is increasing thanks to this factor, while others don’t believe that this is the case. Millennials are known to be conventional individuals in terms of buying homes for their families. They care a lot about safety, so they will take their time looking for convenient homes in safe areas.
Although they are more interested in homeownership today, it took millennials some time to start purchasing their own homes. This is due to the housing market’s conditions, but also different factors in their lives.
Many millennials have been burdened with low-income and massive student loans, significantly affecting their ability to buy a house. On top of that, getting a job straight out of college has proven to be more difficult than they imagined. But the good thing about millennials is that they are very good at planning. All of this results from being forced to participate in various activities during their childhood, such as sports. Compared to Generation X or Boomers, they are much better at scheduling. Therefore, when buying houses, they are not as extreme as other generations but rather prefer to plan everything carefully to ensure a satisfying outcome.
It Is Easier to Access Risker Home Buying Options
People can now find riskier purchasing options when it comes to houses. Not everyone is able to buy a house right now, so they tend to go the extra mile to find alternatives in the meantime.
Some individuals take out down payment loans to be able to make the down payment for their new house. Although it can be a good option for people who do not have a big budget but want to get a specific house, buying a house with no down payment amount is never recommended, which will only get you into more debt.
One popular trend has also been the “rent-to-own” agreement. This type of agreement involves renting a house before buying it. This gives you time to explore the property and see what living there is like, but it also gives you some time to organize your budget before buying the home and becoming the sole owner. People enter these agreements because it makes it much easier to find a suitable home. This way, you don’t have to save money first or lose out on nice offers. Not to mention that you do not have to save for down payments either.
However, one thing to keep in mind is that the rent is quite pricey in these cases, which is a disadvantage. At the same time, if you decide that you don’t want to buy the house, after all, you cannot recover the rent money that would’ve gone towards your ownership.
The Bottom Line
The current housing statistics and trends can show you what is happening in the housing market and what you can expect. Take a look at these numbers and factors and ensure you plan your home buying process carefully to avoid unpleasant situations.
