The Zillow Group's Consumer Housing Trends Report 2018 is out! It does have some amazing details in it and we asked Kelly House, real estate services manager here at Plus, to give us his highlights for renters, buyers and sellers.
- Most renters move from one rental to another, but 46 percent say they considered buying a home during their last move.
- More than a third (37 percent) of renters choose to rent because they want to be able to move easily if their life changes.
- One-third of renters (33 percent) know for less than two months they will move.
- Millennials, those between the ages of 24 and 38, comprise 42 percent of the nation’s home buyers.
- Nearly half (46 percent) of buyers are purchasing their first home.
- Today’s buyer spends nearly four and a half months, on average, looking for a home.
- Nearly half (48 percent) of all buyers today purchase a home in the suburbs, while 31 percent buy in an urban market, and 21 percent purchase in a rural area.
- More than half (53 percent) of sellers are selling a home for the first time.
- The majority (61 percent) of sellers are also trying to buy a new home at the same time they are selling.
- Trustworthiness is the top-quality sellers consider when selecting an agent; 86 percent say it’s extremely or very important.
Despite a booming U.S. economy, strong housing demand, record job report and rising wages, ideal demographics and good personal debt situation, there are predictions of housing crashes. How will interest rates impact? Without wage increases, where will prices go? Have things peaked? What are your predictions in the housing market heading into 2019?
Again, we asked Mr. House for more of his thoughts:
"These are the three factors that are most likely to determine where the housing market goes next.
- Mortgage rates: At historically high prices a small change can make a big difference in affordability. For every 1% increase in mortgage rates, the monthly cost of your mortgage payment increases by 11%. So, if you qualified for a $500K home at 3.5% rate then you would now qualify for a $445K home with rates at 4.5%.
- Wages: Nationally, personal income per capita has risen 25% since the end of 2011, while the S&P/Case-Shiller national home price index is up 48% (neither figure is adjusted for inflation).
- Inventory levels: Most markets are experiencing an increase in months supply of inventory. Over the past y-o-y, the months supply of inventory nationally has increased from 5.3 to 7.1 months. Lower price points continue to see lower inventory levels compared to higher price brackets.
All three factors are pointing toward weakness coming in the housing market or at least a slowing in pricing appreciation."
Amid a thriving economy, the nation’s housing market remains strong, with home values rapidly rising and for-sale inventory diminishing. But some of the largest markets began experiencing a slowdown this summer as rising interest rates and surging home prices have made it difficult for some potential buyers to keep up. By July, inventory had perked up in a handful of the nation’s most competitive markets, giving those buyers more options and a bit of much-needed breathing room.2 Whether that breathing room is just a pause or the earliest signal of an emerging buyers market will determine the extent to which buyers and sellers and their partner-agents recalibrate strategies to adapt to changing realities.