Every year the real estate market reveals its own quirks and idiosyncrasies. The market and economy are two major reasons why trends change. In 2017, real estate experts are predicting three major home-buying trends to dominate.
1. First-Time Buyers Out in Force
According to a Realtor.com trends survey, it’s estimated that just over half (52 percent) of all buyers in 2017 will be first-time home buyers, compared with just 33 percent in 2016. Significantly, the overwhelming majority of buyers (61 percent) will be under the age of 35.
Millennials, the group born approximately between 1980 and 1999, are reaching the point where they are financially and emotionally able to strike out on their own. Expect to see lots of competition for affordable starter homes; demand may push prices through the roof in some markets.
2. Everyone’s Looking for the “Move Up” Home
As Millennials mature, so do their housing needs. The property of choice is no longer a loft-style condo in a hot urban center. In 2017, Millennials will be looking for move-up homes with space for growing families. Safe neighborhoods, private yards, and more space, inside and out, top the home-shopping list as buyers seek more bang for their buck. Expect the suburbs to reclaim their cool status, with hot competition for single-family homes in good, safe neighborhoods that have reliably strong public schools.
3. Debt Is a Major Barrier to Home Ownership
Throughout 2016, the lack of inventory has been pushing up prices and pricing buyers out, especially in cities like New York City, Dallas, San Francisco, Atlanta, Chicago, and Seattle. It’s no surprise, then, that mortgage qualification issues are at the front of buyers’ minds for 2017. When questioned, 37 percent of would-be homeowners said their biggest concerns are coming up with the down payment and getting their credit in check. The National Association of Realtors noted that 44 percent of Millennial buyers had a student-loan debt balance of at least $25,000—an intimidating obstacle for younger home buyers. Looser mortgage regulation would help first-time home buyers who have been feeling the pinch of today’s tough lending standards.