As we begin the 4th quarter of 2018, many wonder what the housing market will bring. Will housing prices rise or fall? Will the interest rate reach 5% before the end of the year?
Expect a Slowdown in Home Prices
As the Autumn temperatures begin to drop in Michigan, buyers may find the housing market is cooling down as well. The cost of homes is not falling, but the rate of increase is slowing down. One reason for the slowdown is that buyers aren’t willing to pay such high prices for such little home, forcing sellers to lower their asking price.
It’s possible that the last 3 months of 2018 could shift from a seller’s market “to one of maybe more balance or potentially somewhat of a buyer’s market later this year,” says Mark Fleming, chief economist for First American, a real estate services company.
Learn More: Is the Housing Market Finally Shifting to Help Buyers?
Interest Rate Predictions
Interest rates have stayed below 5% for the past eight years. (In February of 2011 interest rates hit the 5% mark but that only lasted for a short 2 weeks.) However, interest rates have been on the rise and many forecasters predict that the interest rate will increase to 5.5-6% over the next two years. But will we see the increase before years end? According to mortgage experts, rates should not hit 5% in 2018, but they may come close.
Homebuyers Continue to Get Younger
The amount of millennials purchasing homes has been steadily increasing ever since since it bottomed out at 34.1% in 2016. In the second quarter of 2018 people under the age of 35 made up 36.5% of the homebuyer population.
We’ve already noticed the trend of millennial home buyers getting younger. But what about Generation Z?
According to a recent survey from Property Shark, 83 percent of Gen Zers born between 1995 and 1999 plan to buy a home in the next five years.
One major obstacle for Millennials and Gen Zers is the ability to save a down payment, coupled with the lack of knowledge about down payment assistance loan programs.
Many potential buyers still think they need to save for a 20% down payment when the fact is you can buy a house with a lot less than 20% down.
FHA loans only require 3.5% and certain conventional loans require only 3%. There are also several other loans that offer 100% financing, such as VA loans and USDA loans.
Consult with a mortgage specialist for more information on these loan programs.
Learn More: Metro Detroit Mortgage Lender Discusses How Millennials Are a Driving Force in Real Estate
Learn More: How Homebuyers are Getting Younger and Younger
About Julie Krumholz, Clinton Twp. Mortgage Lender
Julie Krumholz is a mortgage lender from Superior National Bank, located in Clinton Twp., Michigan Julie’s 30 years of experience and extensive list of mortgage programs available allow her to offer some of the most competitive mortgage rates in the Metro Detroit area.
If you are looking for a Clinton Twp lender that you can rely on, call Julie Krumholz today at: 586-382-5482.
