The real estate market has changed immensely over the last year, with increasing housing prices as the year continues. What are the trends that are leading to such a booming real estate market?
Trends in the Housing Market
When you pinpoint the trends contributing to rising home prices, you can use them to predict whether the current housing climate will continue or hit a breaking point. Everyone wants to know if this real estate bubble will burst. Take a look at today’s housing trends:
Seller’s Market: In this time of real estate where homes are staying on the market an average of only 10-days in some areas, it is a seller’s market. You can expect to sell your home without having to offer any concessions, and buyers even waiving inspections and appraisals. On top of all of that, you can get thousands of dollars over the asking price.
Decreased Interest Rates: The interest rates on loans to buy houses are at a low, around 3%. With such low-interest rates, buyers are qualifying for more square footage and getting in the door of some neighborhoods that were once out of reach.
Low Inventory: Put simply, there are more buyers looking than there are homes for sale. The low inventory creates a run on each home put on the market, often with multiple offers per home. These competitive bidding wars just put more urgency into finding a new home, especially when their previous homes are selling so quickly.
Increased Need for Private Space: The pandemic led to many people working from home. Now that things are getting back to normal, remote work is here to stay for many companies. Because of this, there is a need for more space. Home offices are a must. Private backyard space also became a vital asset during the pandemic and is something many buyers are seeking.
Millennials Buying Homes: The main demographic buying homes during this boom is the millennial age group. They are a rising generation that is looking to settle down and make a house their home. This influx of buyers just adds to the high demand, low inventory problem.
All of these trends together have brought us to a 15% increase, varying depending on location, or more in home prices compared to last year. With low inventory and high demand, homes will continue to fly off the market.