The fact that employment continues to grow will allow consumers to purchase property or upgrade to a new one. According to Adam Hochfelder, a real estate director this will probably be one of the main drivers behind 2016.
This year, we can also expect a healthy growth in home sales and prices, although at a slower pace than in 2015. Still, we should not take this slowdown as an indication of an issue, because it’s simply a return to normal standards. The last 15 years we have lived in somewhat abnormal trends, and after working off the devastating effects of the housing bust, we’re finally seeing signs of more normal conditions.
Distressed sales and new constructions are ought to return to more historic levels. Home prices are also expected to follow at a more normal rate consistent with a more balanced market.
Generational buying trends are also expected to shape up. 2016 may finally be the year that younger adults establish their presence on the housing market. This has been predicted for years, but this may finally be the year they make a move in a larger way. The so called Millennials generation reported around 2 billion sales in 2015, which is one-third of homebuyers. This trend is expected to continue and to become a major buying pool in 2016. With most of the buyers aged between 25 and 34 it is expected them be the first-time homebuyers next year.
Other generations will also have a big presence in 2016, as we are financially recovering from older baby boomers entering retirement. But because most of these people already own homes, they’ll have a double role, boosting the market as both sellers and buyers.
New-home construction is expected to focus more on affordability. Builders could be faced with higher land costs and limited labor about the demand of the entry-level market. Because of that they have shifted to constructing more higher-priced homes, and that might cause new-home prices to rise significantly faster.
Another important factor that Adam Hochfelder points out is the increasing rental cost. Rental costs have reached highest levels, and are expected to keep going up in 2016. Around 85 5 of USA’s markets have rents that exceed 30 % of the renting households income.