This fall, two key factors dominate real estate: affordability and mortgage interest rates. Low mortgage rates boost affordability, but prospective buyers feel like they don’t have much choice. Here are 5 trends affecting real estate this fall:
Low Inventory – Prospective homebuyers know all too well that there are not enough houses for sale. Supply isn’t going to catch up with demand this fall: We’re heading into the months when fewer people put their homes up for sale than they do in the spring and summer.
New construction is failing to keep up with household formation, meaning that the low vacancies in rentals and the tight supply of homes for sale will continue to be a key theme for housing in the months ahead.
Rising Home Prices – Home sales slowed toward the end of summer. Normally, you would think that if fewer people are buying homes, then prices wouldn’t increase very much. But home prices went up 5.1% recently compared with 12 months earlier, more than double the overall inflation rate.
Home sales inched backwards because inventory isn’t picking up to tame price growth and replace what’s being quickly sold. It is anticipated that there will be an expected seasonal decline in new listings in coming months, which could accelerate price appreciation.
Rents Will Keep Going Up – Rents for apartments and houses keep going up. The number of singlefamily houses for rent has surged in the years following the housing crash. About 15.2 million houses were for rent in 2015, according to the National Multifamily Housing Council. In 2012, about 12 million houses were for rent. Even with such rapid growth in the number of houses for rent, some markets have seen steep rent increases for 3-bedroom houses.
Mortgage Rates To Remain Low – No one has a crystal ball, however it looks like rates will stay where they are. Economic growth is slow and inflation is low. We are in a deflationary world, for the most part, and interest rates are the beneficiary.
More Detailed Credit Reports – Now lenders are digging even deeper into your bill-paying history. Mortgage lenders are now looking at whether you pay off your credit cards every month or you carry balances from month to month. If you pay off your credit cards every month, you’re more likely to qualify for the best rate and lowest mortgage fees. If you make minimum monthly payments and you carry over balances every month, you might end up paying more for your mortgage.