The quickening pace of home sales over the past year included a small rebound from two key segments of buyers who have been missing in action in recent years: first-time buyers and single women. A new normal means interest rates will be staying low – well below 5% for the next several years – amid shifting demographics bringing homebuyers to the market.
The breeze of change is carrying in a current of homebuyers with divergent demographics from recent years past and the market will bend because of it. Millennials continue to heave their way into the head wind of this trend. Real estate reporter Ben Lane of Housingwire.com directly attritubtes the market transition to a shift in “household composition and a change in demographics as more millenials approach homebuying age.” That being said, other elements of the meandering market are gaining ground and catching air. Chief economist for CoreLogic, Frank Nothaft, asserts, “Over the next 10 years, three-fourths of new households will be minority-headed.” With an updraft of young adults, women, and minorities, home sales will most likely rise like the wind.
This burst in homeownership amidst a demographic ramble is in part due to an aire of economic repair. CNBC’s Chief Economist Jed Kolko suggests that “both the improving economy and the aging of millennials will give homeownership a boost.” And though they are underdogs of affordability challenges, the demographic drifters won’t be overblown as NAR Chief Economist Lawrence Yun maintains: “The allure of homeownership is not lost among the younger generation. Those under age 35 made up 61 percent of first-time buyer transactions.” Carried in on the gusts of this demographic turn is what Nothaft dubs “a new era in mortgage rates” curbed by low levels moving into next year. All things considered, the new norm might just be the breath of fresh air the market’s been waiting for.
Are you a single woman, member of a minority group, or first-time homebuyer looking to make the big move?
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