Noteworthy Undercurrents and Trends in the Real Estate Market
The real estate market has seen its shares of ups and downs in recent years. Last year, housing prices in the United States continued to rise, but 2019 is now history. The question that prospective buyers and sellers are asking themselves as they plan is will that upward trend continue, will it taper off, and/or will it reverse itself? While US housing prices rose by five percent in 2018, they only rose by 3.3% in 2019. Analysts now predict that the real estate market will continue to grow in 2020, though at a slower rate than in 2019. Potential buyers, sellers, and investors in real estate should factor that projection into their considerations.
Millennials’ Surprising Role in the Home Buyers’ Market
As they have grown into adulthood, millennials have become a dominant force in the American buyers’ market of residential real estate. Data for 2019, for example, indicate that millennials accounted for 45% of all home buyers in the US, whereas 17% were Baby Boomers and 37% belong to Generation X. Millennials, i.e. people born between 1980 and 1998, have increasingly begun to settle down after finding stable and well-paying jobs, buying mainly middle-class and even upper-middle-class homes.
Knowing that a disproportionate number of home buyers are millennials is very helpful for sellers, who can then focus accordingly. All but two percent of millennials in the market for buying homes did much of their search online, and fewer than 20% of them found their homes in a listing that they didn’t access on a mobile device. With that being the case, sellers in the current market are advised to make extensive use of photos and video footage—preferably a video tour of the home—that they can post online.
An Eye on Europe
If you’re contemplating buying real estate purely as an investment, you might consider investing in one of the major European cities. Emerging Trends in Real Estate 2020, which is the 17th such annual pan-European real estate focused survey to be conducted, can help provide insight into the hottest real estate trends in Europe. Whereas in 2019 the survey pointed to Lisbon as the hottest spot for real estate investments on the continent, the 2020 pick is Paris, followed by Berlin for the second time in a row. Three other German cities are also in the top ten—Frankfurt, Munich, and Hamburg—if you’re paying achtung!
Mortgage Rates Are Expected to Remain Low
Prices in the real estate market and trendy locations are important factors to consider when contemplating buying a house, but the dollars and cents of the mortgage rate you will be able to get cannot be ignored. Mortgage rates dropped in 2019 to under four percent for most commonplace loans. Prominent economists who have reviewed the data are convinced that interest rates will remain circa 3.7% for thirty-year mortgages and half a point lower for fifteen-year mortgages.
