Housing Market Returns To Normal
b'With Terry Story, 26-year Veteran Real Estate Agent with Coldwell Banker in Boca Raton, FL
This week, Terry talks about a return to \\u201cnormal\\u201d in the housing market after the best-year ever since 2007. So Terry believes the home-buying market will stabilize and slow down a little after rising sharply higher over the past few years. With a strong jobs report and clear signs that the U.S. economy appears to be getting back on its feet, Terry expects more millennials to enter the housing market, just as baby-boomers downsize as they enter retirement. Builders, who had earlier targeted higher-priced luxury homes, now see a trend reversal that makes affordable construction more appealing \\u2013 to match the increased number of lower-paying jobs. As a result, markets with the highest prices could see some cooling.
And while the Federal Reserve has raised short-term interest rates, long-term interest rates remain really low by historic measures and continue to support the return to normalcy in housing. Moreover, high rental rates \\u2013 with many renters paying more than 30% of their income towards rent \\u2013 might also spur a move away from rentals to property ownership, especially if more affordable homes come to market that require a smaller down-payment \\u2013 because in 75% of the U.S., it\\u2019s cheaper to own a home than pay monthly rent.
Terry also addresses the shortage in supply of homes for sale \\u2013 with inventory at just 5.1 months across the U.S. Anything less than six months is a seller\\u2019s market because there is less inventory, solid demand, and prices could be bid up, especially if your home sits in a desirable neighborhood. That said, it may not always pay to downsize if you live in a state that rewards home ownership through lower taxes, or where downsizing does not really improve your overall quality of life.'