Home-buying activity among Millennials will continue to be a trend for this year, particularly in certain cities, despite an increase in mortgage rates, according to industry experts.
If you plan to buy a residential property in Utah, real estate prices in Salt Lake City serve as one reason why younger Americans favor this market. These properties can include homes for sale in Daybreak or apartments in Draper. In fact, more than 50% of home buyers in Utah’s capital consisted of people who are below 35 years old in 2018 based on an analysis. This led the city to become the most popular market for them.
Real Estate Price Trend
This year will define the housing market through higher mortgage rates and demand from Millennials, particularly those who are turning 29 years old. Most of them will already think about buying their first home in the coming months. As a result, they will comprise 45% of mortgage transactions. The activity will peak beginning in 2020 due to the changing housing needs of this age group over time.
In terms of mortgage rate movement, the figures might be at the same level of increase throughout the economic recession in 2008. Some economists expect the rate for a 30-year, fixed-interest mortgage to reach 5.8%.
Hottest Markets in the Country
Home buyers in Salt Lake City remained unfazed with higher rates as evidenced by the number of mortgage requests last year. Prices in the city stayed more affordable than in Los Angeles and New York City, so affordability seems to be the critical factor for most Millennials.
Their counterparts in Minneapolis and Pittsburgh ranked close behind, as they made up 48% of all house hunters in these cities. It is possible that some buyers even come from nearby towns or neighboring states, such as California. This is not surprising since San Diego and Sacramento are among 50 major cities with the least number of young home buyers.
Cities with the Lowest Percentage
Tampa, Florida, and Las Vegas are places with an even lower number of Millennial buyers, which only accounted for 30% of buyers below 35 years old. If you plan to sell a house in these cities, you may need to wait longer for an uptick in real estate values.
Experts suggested that this year can be a slower time for housing price growth, despite the strong demand from younger Americans. Many will continue to be priced out of the market, and while interest for homes remains strong, the increasing supply will dampen the prospects of a price appreciation by almost 3%. This trend will cause total sales to fall by roughly 2% for this year.
In the end, those who plan to buy or sell a house this year should consult a property management company. Despite being an added expense, this provides you with access to industry insider information that will be valuable, especially in high-demand areas. By consulting with a professional, buyers know where to look for a potential home purchase or sale.