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Real Estate: It's a Seller's Market
The spring real estate market is under way. Several interesting twists are affecting the marketplace this season. Mortgage rates are rising. Simultaneously, inventory is low—the lowest in almost two decades. Low inventory affects home sales, because available inventory is moving more quickly than it did in 2016 and driving home prices even higher than equity would suggest. It's a seller's market!
After a peak in 2006, the number of new (first-time) and recent homebuyers has been uneven. The figure below illustrates the number of home-buying households. Between 2002 and 2016, the number of first-time home buyers has declined from 5.6 million to 4.4 million, and the number of households likely or somewhat likely to buy a home for the first time declined from 13.4 million to 9.5 million. The number of households purchasing a new or different home has increased from 5.7 million to 6.9 million during the same period. Although the number of existing homeowners expecting to buy in the next year is on the upswing from 2014, it is much lower than in 2006.
First-time home buyers are younger than recent home buyers, as conventional wisdom suggests. However, a number of important questions about home buyers exist. For example, why has the number of recent home buyers rebounded, whereas the number of first-time home buyers has not? Which life events are the most likely to trigger a home purchase? To what extent are home buyers using the internet to find a mortgage lender? Do the financial attitudes and goals of new buyers differ from those of recent buyers? And if so, how? Please, contact us for answers or to discuss your questions.
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