According to http://www.inc.com/, change is the only thing you can rely on in the real estate industry. It should therefore come as no surprise that we’re in for some changes this year!
Here are the changes expected to happen in the real estate industry this year:
1. Already high rents will go even higher
Already busting your tail to pay rent? Unfortunately, this will not get any easier in 2016. In fact, it’s expected to get worse. If people come to the conclusion that buying is favorable to renting, they’ll quickly start looking for homes to buy. This is not very promising for the residential real estate investors out there.
2. Mortgage rates are expected to go higher
By the end of 2016, mortgage rates are expected to go higher than the current 30-year fixed mortgage rate which currently stands at 4.05 percent. Just as in 2015, the rate is also expected to swing this year.
By December, the rates are expected to hit 4.5 – 4.6 percent. The rates will drive the mortgage payments higher, which will slow down the sales of luxury homes. People will be looking for less expensive options as a result of higher rates.
3. Millennials will continue to drive sales, but not as much as in 2015
According to http://www.inc.com/, millennials bought close to two million homes in 2015 making them 32 percent of the homebuyers.
Although recent college graduates are not living in the lap of luxury, they have a high average income which makes them able to afford mortgage payments in addition to their student loan payments.
Still, the Millennial market is projected to slow down in 2016.
4. Gen-X will make a comeback
Although the Great Recession took it’s toll on the Gen-X’ers, they are what is called “financially recovering.” Many Gen-X’ers are expected to sell their homes in order to move to a nicer neighborhood or sell so they don’t have to pay rent anymore.
5. 2016 will be a sellers market
The real estate market is expected to see a jump prices this year. As the demand overshadows the supply, buyer’s will feel forced to pay more for what they want.
To summarize, the outlook for the 2016 real estate market is strong!
Read the original article HERE.