If you are a real estate market investor, then you understand the importance of remaining up-to-date on housing market trends both nationally and within your local communities. Let’s take a look at a current trend as well as a potential movement for the future.
Pending Home Sales and Rising Mortgage Rates
Over the last few years, investors and potential homebuyers alike have gotten accustomed to low mortgage rates – rates that were kept low to help encourage people to invest in a rocky real estate market. However, as the national housing market has shown considerable progress toward recovery, these interest rates are rising, which is affecting pending home sales – but only slightly.
According to the National Association of Realtors, pending home sales declined slightly from May to June of this year because of higher mortgage rates. However, pending sales were still up 10.9% from 2012.
Although some potential homebuyers are backing out of pending deals due to floating mortgage rates, overall pending home sales are rising despite higher interest rates. This trend will more than likely continue throughout the foreseeable future as the housing market continues to make progress toward “normal.”
Upcoming Trend: Mini-Apartments
One of the potential upcoming trends for the future – especially for big cities with limited space – is the increase of mini-apartments. Over the last few years, Americans have been downsizing, and will more than likely continue to do so in the near future. Plus, with the digital society that we currently live in, the needed space is limited – everything from books and movies can be kept on handheld devices and “in the cloud.”
These mini-apartments are incredibly popular in Europe and will more than likely increase in popularity in U.S. cities in the near future. In fact, cities like Seattle and Manhattan already have mini-apartments, which have proven to be rather attractive for Millennials.
In short, pending home sales and the development or mini-apartments will likely continue to increase throughout the near future. Keep an eye on these two trends, especially if you are a real estate investor.
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