How Millenials Are Strengthening the Housing Market
Looking to buy or sell a home? Now is a great time as the housing market continues tostrengthen. In fact, earlier this year, the National Association of Realtors reported that pending home sales were at their highest level in close to a year and were at their second-highest level in over a decade.
Home sales and median home sale prices are expected to continue to increase this year, so now is a great time to start looking if you’re in the market to buy a new home. Why the sudden upward shift in the housing market? Well, you may have millennials to thank for that.
Research shows that an individual’s peak home-buying years are between the ages of 25to 45. The term millennials refer to a generation of individuals that are aged 20 through 36 in the year 2017. As the largest generation to date, surpassing even baby boomers, more and more individuals belonging to the millennial generation are entering those peak home-buying years. Fortunately, as more and more millennials enter the housing market, they’ll have more new houses in Vancouver to consider buying.
While in recent years, there has been a shortage of supply in the Vancouver housing market, Sammamish Mortgage predicts that more new houses in Vancouver will be constructed in the coming years. This is particularly true in the Ridgefield area, located just north of Vancouver. While Vancouver still has a housing supply shortage, New Tradition Homes is one of the builders changing that. As one of the largest homebuilders in Washington State, we have built thousands of homes and are positively influencing the housing supply in the Vancouver area.
As the economy continues to strengthen, there is a good reason to believe millennials will drive the housing market nationally, but particularly here in Vancouver, Washington. That’s because Portland, Oregon as well as Vancouver ranked in the top ten of metros nationwide. Due to population growth and the strong local economy, this is one of the best places for new homebuyers to settle.
In addition to entering peak home-buying years, another reason millennials are entering the housing market is the improved economy. While a lack of housing affordability was a key reason one in three millennials were opting to live with their parents just a few years ago, the market is beginning to stabilize. This translates to rental affordability, which in turn means that millennials can save toward a down payment on a first home, which was one of the barriers to homeownership previously.
But, because the market is strengthening, interest rates are going up as well. That means now is an optimal time to start looking for new houses in Vancouver and the surrounding areas. First-time homebuyers will want to lock in mortgage rates before they rise, as projected, later this year.
Following the recession, the Federal Reserve kept the federal funds’ rate at 0.25 percent for seven straight years. It raised the rate to 0.5 percent in December 2015. In March of this year, it was increased to 1.0 percent, the second increase in a three-month period. The federal funds’ rate impacts other interest rates and is expected to continue to rise later this year. What does this mean for homebuyers? It means now is the optimal time to buy a home to lock in an affordable mortgage interest rate.
The impact of millennials on the housing market is backed up by data as well. To consider what will happen in 2017, consider home buying trends from the previous year. Zillow, a real estate and rental marketplace, reports that almost half of homebuyers in 2016 were first-time homebuyers. Millennials made up more than half of those first-time buyers. That means millennials were responsible for more than a quarter of all home sales in 2016. Zillow predicts this trend will continue as more millennials enter the housing market this year.
Zillow also predicts that home prices will increase by 3.6%. Though Zillow predicts that homebuyers will have to pay more for a new home in order to cover increased construction costs, New Tradition Homes specializes in finding homebuyers the right home within their budget. If you’re in the market for new houses in Vancouver, we will work with you to find you exactly what you need.
Often times, people have a desire to purchase a new home, but are unsure whether they can actually afford one. New Tradition Homes works with preferred lenders to help ensure a seamless home buying and closing experience. Also, by using one of our preferred lenders, you will receive a $500 credit to be used towards loan fees or closing costs.
The decision of many millennials to delay purchasing a new home means that in 2015 homeownership rates were at an all-time low. However, the trend is reversing and millennials are responsible for driving that trend upward.
In fact, more than a third of millennials anticipate buying a home within the next two years. And of roughly 87,000,000 millennials, 65.3% believe owning a home is tied to the American dream. That’s a greater percentage than any other generation.
Additionally, an overwhelming number, 91% to be exact, say they plan to own a home someday. With those high percentages, it’s easy to see why millennials have become key housing market influencers.
Are you in the market to buy? Are you still unsure about whether now is the right time to buy, but you want to know more about available new houses in the Vancouver area? Contact New Tradition Homes today. We’ll walk you through our prebuilt quick move-in homes to give you a sense of what we’re able to provide.
If you’re interested in designing and customizing a new home, our in-house design team will show you the design plans we have available, as well as the countless options you can choose from based on your personal style. Millennials may be driving the housing market at the moment, but now is a great time for anyone to buy. New Tradition Homes is here to help you on the hunt for your dream home.