Our Economist’s Top Tips for Buying a Home in 2016 – from Realtor.com

I am reading these economic predictions as much as you are.  Enjoy this one from Realtor.com

Our Economist’s Top Tips for Buying a Home in 2016

By: Cicely Wedgeworth

There’s a lot of tried-and-true advice out there for would-be home buyers (including our own). But the housing market is changing all the time, and if you’re on the hunt for a home, you need to stay aware of the latest trends—and how they’ll hit you where you live (literally).

In order to help buyers land their dream home in 2016, the realtor.com® economic data team has done its homework on the stats that matter to come up with a short list of its best advice.

“Buyers looking to close this year need to keep an open mind and be prepared to move quickly when they find a home that meets their needs,” says Jonathan Smoke, our chief economist, citing “fierce competition among buyers.”

Start your search early

The No. 1 tip that his team came up with, Smoke says, is to kick off your home search early.

“If you’re intending to purchase, based on the volume of house hunters who are just like you, consider doing it sooner rather than later—you’re likely to get a better price and a better mortgage rate,” he says, pointing out that there’s far more inventory available relative to the number of sales in the off-peak months.

More than 85% of buyers who plan to purchase in the next year intend to buy in the spring or summer of 2016, according to the most recent realtor.com survey. With roughly 50% more listings inventory relative to the number of potential home sales expected in January and February, buyers who start their search early face less competition with nearly the same number of homes.

Comparison shop for mortgages

“Work as hard on the mortgage as you do on finding a home—this will pay dividends over the life of the mortgage that you have,” Smoke says. “Don’t just assume that the 30-year fixed mortgage is the best for you.”

Mortgage rates are expected to reach 4.65% by the end of the year (while prices are predicted to rise 3% year over year), but many consumers aren’t aware of the variety in mortgage products that can affect what they pay, Smoke says.

A lower interest rate can make the difference in qualifying for a loan to buy a certain home—not to mention saving you thousands over the life of the loan. So make sure to shop around!

Consider a new home

If there’s anything that can ease the current housing crunch, it’s new construction. But many people just rule out the option, Smoke says.

“You either know about new homes or you don’t know about new homes,” he says. “The vast majority of people don’t, and they make the assumption that they’re not right for them because they’re too expensive, et cetera.”

Just keep an open mind, Smoke advises. After all, the number of new homes on the market is expected to grow more rapidly in 2016, resulting in a 16% increase in new-home sales year over year. But the lack of awareness about new homes means you’re likely to encounter less competition.

While new homes are typically more expensive, they also come with warranties on the structure and appliances—so you’re not likely to get stuck with any hefty repair bills for the first few years.

Markets where new homes will capture a higher share of sales include Boise, ID; Charleston, SC; Salt Lake City, UT; Nashville, TN; and Myrtle Beach, SC.

Picture yourself in the Midwest or the South

The biggest issue expected to hold buyers back this year is an inability to find a home in their price range. Buyers in the Midwest and South have an advantage there.

Local markets such as Dayton, OH; Birmingham, AL; Harrisburg, PA; Augusta, GA; and Des Moines, IA, offer buyers high affordability, increasing inventory, and favorable lending standards.

Of course, relocating depends on many factors, the most important being the availability of jobs in your field and a network of friends and/or family, but if you’re living from paycheck to paycheck in California, it’s worth checking out your options.

Check out the full 2016 realtor.com housing forecast BELOW.

 

Realtor.com® 2016 Housing Forecast Predicts Healthy Market with New Construction Driving Highest Level of Home Sales Since 2006

Millennials, Gen X’ers and retirees will account for majority of 6 million homes sold in 2016

Dec 1, 2015

SAN JOSE, Calif., Dec. 2, 2015 /PRNewswire/ — New home construction and moderate gains in the existing home market will deliver the necessary one-two punch to push total home sales to the highest levels since 2006, according to the 2016 housing forecast issued today by realtor.com®, a leading destination of online real estate services operated by News Corp [NASDAQ: NWS, NWSA] [ASX: NWS, NWSLV] subsidiary Move, Inc. The forecast also identifies the top 10 markets for growth, as well as expectations for home prices and sales, interest rates and new home sales and starts.

2016 national housing outlook 
The 2016 housing market is expected to be a picture of moderate, but solid growth as acceleration in existing home sales and prices both slow to 3 percent year over year due to higher mortgage rates, continuing tight credit standards, and lower affordability. The new construction market will see more significant gains in the coming year as new home starts increase 12 percent year over year and new home sales grow 16 percent year over year. Total sales for existing and new homes will reach 6 million for the first time since 2006, a result of a strong gross domestic product increase of 2.5 percent and continued job creation. These healthy economic indicators will be tempered by lack of access to credit and rising home prices, which will ultimately limit housing demand and growth. [See table 1 for full forecast.]

“Next year’s moderate gains in existing prices and sales, versus the accelerated growth we’ve seen in previous years, indicate that we are entering a normal, but healthy housing market,” said Jonathan Smoke, chief economist for realtor.com®. “The improvements we’ve seen over the last few years have enabled a recovery in the existing home market, but we still need to make up ground in new construction, which we could begin to see in 2016. New home sales and starts will bring overall sales to levels we have not seen since 2006 and will help set the stage for a healthy new home market.”

Who are the 2016 home buyers?
Next year’s standout year in total sales will be driven by three distinct segments of home buyers – older millennials (25-34 years old), younger gen X’ers (35-44 years old), and retirees (65-74 years old), according to Smoke.

Millennials: They are expected make up the largest demographic of home buyers in 2016, having represented 30 percent of the existing home market. Driven by increasing income, millennials will seek out homes that meet the needs of their growing families – putting the most weight on the safety of the neighborhood and the quality of the home. Commute time and a preference for older homes have these buyers looking in city-centers and closer-in suburbs. According to realtor.com®’s proprietary research, the following markets are expected to be some of the most sought out markets for millennial home buyers in 2016 due to their large numbers of millennials, strong employment growth, and relative affordability.

1.    Atlanta-Sandy Springs-Roswell, Ga.
2.    Pittsburgh
3.    Memphis, Tenn.-Miss.-Ark.
4.    Boston-Cambridge-Newton, Mass.-N.H.
5.    Austin-Round Rock, Texas

 

Young gen X’ers: Accounting for 20 percent of home purchases in 2015, buyers between the ages of 35-44 will be back in the market again likely making up the second largest population of buyers in 2016. These buyers have rebounded from the financial crisis and are entering their prime family-raising and earning years. More than two-thirds of the buyers in this age group already own a home. They will be moving out of a starter home into a larger home or more desirable neighborhood. All the markets on this list are seeing an uptick in growing families, declining unemployment and growing household incomes.

1.    Atlanta-Sandy Springs-Roswell, Ga.
2.    Denver-Aurora-Lakewood, Colo.
3.    St. Louis, Mo-Ill.
4.    Charlotte-Concord-Gastonia, N.C.-S.C.
5.    Columbus, Ohio

 

Individuals or couples looking to relocate or retire: This group is expected to make up the third largest home buying segment in 2016. Ages 65-74, they will be selling their current home in an effort to downsize and lower their cost of living. Last year, they represented 14 percent of home buyers. They will likely put their home up for sale at the start of the home-buying season in March or April, and aim to make a home purchase following the sale of their home. This age cohort has a very strong preference for newly constructed homes and put the most weight on their ability to customize their home. Homes in the following markets are expected to see the most retiree buying activity in 2016 due to a large share of population as well as rapidly rising home values.

1.    Boston-Cambridge-Newton, Mass.-N.H.
2.    Sacramento–Roseville–Arden-Arcade, Calif
3.    San Diego-Carlsbad, Calif.
4.    North Port-Sarasota-Bradenton, Fla.
5.    Cape Coral-Fort Myers, Fla.

 

Top 10 growth markets and other winners
According to Smoke, several markets are poised for substantial growth in prices and sales. Each market demonstrates strong demand dynamics, evidenced by 60 percent more listing page views on realtor.com® than the U.S. overall and inventory that moves 16 days faster than the U.S. average. Surging demand in each market can be attributed to growing household formation, a prosperous job market, and low unemployment rates as well as large populations of millennials, young gen-X’ers and retirees. Realtor.com®’s 10 hottest markets for 2016 are:

View News Release Full Screen

1.       Providence-Warwick, RI-Mass.       6.     New Orleans-Metairie, La.
2.       St. Louis, Mo.-Ill.       7.     Memphis, Tenn.-Miss.-Ark.
3.       San Diego-Carlsbad, Calif.       8.     Charlotte-Concord-Gastonia, N.C.-S.C.
4.       Sacramento–Roseville–Arden-Arcade, Calif.       9.     Virginia Beach-Norfolk-Newport News, Va.-N.C.
5.       Atlanta-Sandy Springs-Roswell, Ga.      10.    Boston-Cambridge-Newton, Mass.-N.H.

 

Table 1: Realtor.com® Forecast for Key Housing and Economic Indicators

Housing Indicator Realtor.com® 2016 Forecast 2015 Expected Actuals
Home price appreciation 3% increase 6% increase
Mortgage rate Reaching 4.65% (30-year fixed) by end of year 4.15%
Existing home sales 5.4 million, 3% growth 5.26 million, 6% growth
Housing starts Overall 12% growth in home starts; 15% growth in single family home starts Overall 10% growth in home starts; 7% growth in single family home starts
New home sales Increase 16% with increased single family construction Increase 14% with increased single family construction
Home ownership rate Decreases slightly to 63.3% from forecasted 63.4% for 4Q 2015 63.4% for 4Q 2015

 

Economic Indicator Realtor.com® 2016 Forecast 2015 Expected Actuals
GDP 2.5% increase in GDP, uptick in growth 2.1% increase, declined from 2014’s 2.4%
Household income 2% growth 2.4% growth
Household formation 1.5 million increase, driven by millennials 1.4 million increase
Unemployment rate Decline to 4.8% by year-end Decline to 5% by year-end
Nonfarm employment Gain of 2.5 million jobs, an average of 208,333 per month Gain of 2.52 million jobs,  average of 210,000 per month

 

For more realtor.com data and trend information, please visit: http://www.realtor.com/data-portal/realestatestatistics/.

About Move, Inc. and realtor.com®

Move, Inc. operates the realtor.com® website and mobile experiences, which provide buyers, sellers and renters of homes with the information, tools and professional expertise they need to discover and create their perfect home. News Corp [NASDAQ: NWS, NWSA] [ASX: NWS, NWSLV] acquired Move in November 2014, and realtor.com® quickly established itself as the fastest growing online real estate service provider in the first half of 2015 as measured by comScore.

As the official website of the National Association of REALTORS®, consumers know they can look to realtor.com® for the most comprehensive and accurate information anytime, anywhere. With relationships with more than 800 multiple listing services (MLS), realtor.com® has more than 3 million for-sale listings, which account for more than 97 percent of all MLS-listed for-sale properties. More than 90 percent of the listings are updated every 15 minutes. Move’s network of websites provides consumers a wealth of innovative tools, including Doorsteps®, Moving.com™, SeniorHousingNetSM and others. Move supports real estate professionals by providing many services to grow their businesses in an increasing digital, on-demand world, including ListHub™, the nation’s leading listing syndicator and centralized intelligence platform for the real estate industry; TigerLead®; Top Producer® Systems; and FiveStreetSM and Reesio as well as many free services.

Forward-Looking Statements

This document contains certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on management’s views and assumptions regarding future events and business performance as of the time the statements are made. Actual results may differ materially from these expectations due to changes in global economic, business, competitive market and regulatory and other factors. More detailed information about these and other factors that could affect future results is contained in News Corp’s filings with the Securities and Exchange Commission. The “forward-looking statements” included in this document are made only as of the date of this document and we do not have any obligation to publicly update any “forward-looking statements” to reflect subsequent events or circumstances, except as required by law.

SOURCE realtor.com

 

I read this article at: http://www.realtor.com/advice/buy/our-economists-top-tips-for-buying-a-home-in-2016/?identityID=9851214&MID=2016_01_MonthlyNewsletter-ctl&RID=353497822&cid=eml-2016-01-MonthlyNL-sub1_buying2016-blogs_buy

http://news.move.com/2015-12-01-Realtor-com-2016-Housing-Forecast-Predicts-Healthy-Market-with-New-Construction-Driving-Highest-Level-of-Home-Sales-Since-2006

 

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The Caton Team – Susan & Sabrina – A Family of Realtors

Berkshire Hathaway HomeServices – Drysdale Properties

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Sabrina Caton - The Caton Team Realtors

A native Californian with a passion for residential real estate and writing. A full time Realtor with Berkshire Hathaway HomeServices - Drysdale Properties.

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