Could mortgage rates go lower? Yes. They probably will, but not by 0.5%, and not in a day. They could also go higher. One place they're not going is 0%.If you are a
Seven Predictions And Trends In The 2016 Real Estate Market
The housing market is, increasingly, back. In some markets, with a vengeance. More quality inventory is available, and buyers– particularly young ones — increasingly see homebuying as a good investment. Here’s what we can expect to see on the real estate front in 2016.
1. Prices and mortgage rates will rise — but slowly
Median sales prices for single-family homes have been on the rise since mid-2012, and the trend is expected to increase well into 2016, but at a slower pace than in recent years.
Prices rose 8 percent in 2012, 11 percent in 2013, and 5 percent in 2014 — analysts predict increases of 2 to 4 percent through 2016.
Meanwhile, the number of distressed property sales continues to decline and reduce the number of short-sale and foreclosed bargains to be had.
Mortgage rates, too, are likely to increase in 2016. “They have stayed relatively consistent,” said Allen Shayanfekr, CEO of the equity crowd-funding real estate company Sharestates, “but with volatile public markets, investors will look to capture gains in other markets, i.e., interest rates on mortgages.”
2. The buying crowd is younger
Young millennials (buyers between the ages of 25 and 34), comprise the largest share of homebuyers (32 percent) and the largest share of first-time buyers (68 percent). Whether these young buyers are shopping for a permanent home or a way to make a return on their investment, only time will tell.
3. Beacon technology will change the way homebuyers shop
Armed with a smartphone and cool new apps, buyers can skip newspaper listings and agent appointments for real-time browsing. Thanks to beacon technology, buyers can hang out in a desired neighborhood and receive phone messages about available listings in that area.
And, once the buyer is inside a home that’s for sale (at an open house, for example), the virtual “real estate agent” can provide information about recent upgrades and other details about the listing. The high-tech process doesn’t eliminate real-life agents, but it can take the place of those early, time-consuming one-on-one meetings.
There are also tools available to help you navigate purchase and sale agreements — another task traditionally handled by an agent, but increasingly done by DIY buyers and sellers in for sale by owner (FSBO) transactions.
4. Real estate agents and mortgage brokers will get even cozier
Shayanfekr expects consolidation in the financing space as several marketplace lenders will likely either go out of business this year or consolidate with other companies.
And an increased acceptance of online funding portals to provide financing for real estate investments will appeal to smart young shoppers said Shayanfekr.
Look for more real estate agencies to add mortgage brokers to their in-house teams. Low interest rates mean more buyers, and more buyers mean increased activity for agents. Having a mortgage broker on staff ensures that deals close more quickly and buyers enjoy the best up-to-the-minute interest rate.
5. New regulations change the way buyers and sellers do business
TRID (TILA-RESPA Integrated Disclosure) is a new mortgage lending rule.TRID, which went into effect last August, combines four complicated disclosures into two, hopefully less cumbersome, disclosures.
The Good Faith Estimate and the Initial Truth-in-Lending Statement comprise TRID’s new Loan Estimate. The HUD-1 Statement and the Final Truth-in-Lending Statement are now known as a Closing Disclosure.
“Implementation of the new TRID regulations will frustrate everyone,” said Bruce Ailion, broker attorney for The Ailion Team in Atlanta. “In the most recent survey, Realtors stated that about one-third of transactions have been delayed by financing setbacks, appraisal issues and inspection issues.”
Although TRID regulations place more responsibility and burden on the lender, they are designed to provide increased clarity for borrowers. Ideally, closings will run more smoothly and with fewer errors and less buyer confusion.
“Expect fewer all-cash sales and greater scrutiny for large cash purchases,” Ailion said. New regulations are forcing purchasers of high-end luxury properties to identify themselves within their shell purchasing entities.
“This is likely the beginning of a whole slew of regulatory changes to the real estate industry,” Shayanfekr said.
6. Urban cores are stronger than ever
So, where will these trends be strongest? Look for them particularly in the 18-hour urban cores that are increasingly popular in midsized cities across the nation.
Offering more than just a 9-to-5 urban experience, yet pulling in the reins on around-the-clock bars and buses, an 18-hour city appeals to younger buyers who want late-night options they could formerly find only in 24-hour cities such as New York and New Orleans.
Arpad Benedek / iStock.com
Planners and business owners are creating cities in which people want to work and live. Agents will find themselves pushing fewer homes in the suburbs and more in the heart of the city.
7. Forget swimming pools; buyers want new amenities
Within those urban spaces, “developers will start dedicating outdoor spaces for outdoor theaters so that residents can enjoy movies under the stars in the comfort of their own development,” said William Ross, senior vice president and managing director of Halstead Property Development Marketing in Brooklyn. Meanwhile, “I think that swimming pools — in the building — are on their way out.”
Fitness will continue to be a popular amenity. “Larger-sized, on-site gyms are in high demand,” says Vanessa Connelly, sales manager for Halstead. “Buyers want convenient access to 24-hour, state-of-the-art facilities featuring classes, trainers, saunas, steam rooms and spa services.”