As 2015 draws to an end what is there to say about the real estate market this year? We’ve seen an affordable market in the first quarter, a record breaking low in first-time home buyers, a spike in real estate apps, and an increase of investments in the western market.
2015 marks a big year in technology for real estate agents. As outlined in my slideshare presentation, there are increasingly more apps out there for consumers to utilize when buying a home. Not surprisingly, in a survey by Surveys Monkey, 21 percent of people purchased a home without ever even being inside of it. Apps like Pixeet and Surefield offer real estate agents the ability to give potential buyers a virtual tour of any home in an instant. Buyers also have the convenience of viewing homes and market descriptions on Trulia, Zillow, and Lovely. A newer app to hit the market, Homesnap, allows for buyers to simply take a “snap” of a home that’s for sale and receive property information without ever speaking to a real estate agent or stepping inside. As technology progresses so will the real estate market, thus there is no surprise that in 2015, more people purchased a home without ever actually being inside.
Another big takeaway from the 2015 real estate market was the number of first-time home buyers. According to the Wall Street Journal, first-time home buyers fell to a record breaking 32% of all purchases this year, an all time low in nearly three decades. The general consensus on why the younger generation isn’t investing in a home, was the amount of debt they’ve acquired with student loans. While the millennials are struggling to put money aside, in hopes of saving for a down payment, rents have increased by 20% according to economists. So while the housing market is rising, rents are too, which essentially is making it impossible for millennials to pay their bills and save for a mortgage.
Despite this troubling reality, the housing market in the first quarter was the most affordable in over 2 years. According to RealtyTrac, the housing market was twice as affordable in the beginning of 2015 than in the second quarter of 2006. Wages have increased 34% while the average cost of a home is 12% lower than a decade ago. Interest rates on a 30 year fixed rate mortgage has dropped 13% from 4.34% in 2014 to 3.77% in 2015. “Affordability is improving in most markets thanks to falling interest rates and slowing home price growth,” said Daren Blomquist, VP of RealtyTrac. So, considering all of this, there really hasn’t been a better time to invest in a home than in 2015.
As there are only a few weeks left in the year one can assume the housing market will stay rather stagnant, what’s more is the future of the market going into 2016 and beyond. Technology is only going to further advance and there will always be longevity in student loans. It’s a fair bet in saying that the percentage of people buying homes via computer or mobile device will only increase come 2017. Furthermore, predicting the percentage of first-time home buyers to continue to decrease is plausible seeing as higher education is becoming a more prominent asset when looking for a career. So next year, at this time, reports on the 2016 housing market will likely be just the same.