The spring season means more than warmer temperatures and longer days. Traditionally, it is also the season of property listings and open houses. After a long, brutal winter, buyers and sellers are both eager to get started on their home buying journey.
What can we expect to see as the spring real estate market heats up this season? Here are four predictions for the spring:
#1. Tight inventory. We will continue to see tight inventory on the east and west coasts. Tight inventory will lead to an active market this spring because of high competition for available properties. In addition, tight inventory will present a challenge to first-time homebuyers. They are in a difficult financial position already due to sharply increasing rents across the nation. A short supply of affordable starter homes will add to their financial hurdles.
#2. An increase in first-time homebuyers. We will see more first-time homebuyers this spring and summer and many of them will be commitment-shy millennials fresh from the rental market’s increasing costs. According to Zillow Housing Confidence Index, about 5.2 million renters intend to purchase their first home, especially where the job market has been strong such as Atlanta, Chicago, Dallas, Detroit, and Las Vegas.
#3. Lower down payments. Homebuyers are in a unique position to purchase homes this spring, poised between Freddie Mac’s announcement of lower down payment requirements and the Federal Reserve’s promise to raise interest rates in the near future. Freddie Mac’s Home Possible AdvantageSM program will purchase mortgages with down payments as low as 3.5 percent.
#4. Get tech ready for the millennials. Going forward, as more millennials enter the real estate market, agents and brokerages are going to have to become more tech savvy. Millennials shop, track their diet and fitness goals, arrange transportation, and practically live online. A real estate firm that doesn’t use cutting edge technology will find itself cut off from this important demographic.