Real Estate Market Trends for Summer 2016

by Matty ByloosJune 20, 2016

Real Estate Market Trends for Summer 2016

Another spring is almost over, another summer about to begin. As we head into the warmest months of the year, the real estate market typically tends to cool a bit, following the hottest buying season of the year. But with everything that’s happened in the housing market over the last few years, 2016 may be anything by typical. So let’s take a look at what may be in store for this summer.
real estate market trends 2016

Lack of Available Homes to Purchase Likely to Remain an Issue

As the rental market has continued to heat up over the last few years, a general lack of inventory has slowed sales in many markets nationwide. This has been a primary driver of prices post-crisis, but with prices likely to “normalize” or at least slow their steady climb over the course of the summer, lack of inventory may be less of an issue than it has been recently.

Trouble With Financing for Younger Buyers Likely to Remain an Issue

Millennials, the second largest generation in the history of the United States and the largest living generation, are still having a difficult time making it into the market. Despite their expressed desire to own their own homes, many younger buyers are having trouble getting the funds together to meet the current down payment requirements for financing a home.

This is primarily due to a combination of massive student loan debt, rising rents, and stagnant wages. The federal government may ease some financing restrictions put in place following the recession, but announcements have not been forthcoming.

real estate trends 2016

Rising Rents, Lack of Rental Inventory, and Stabilizing Home Prices

The rental market will most likely continue to heat up through the summer, making rental inventory an even greater issue as home prices continue to stabilize, following a period of significant growth. This will likely provide incentive for a great many buyers who may not otherwise have entered the market this summer.

However, mortgage rates are also expected to continue to climb. This will drive up debt-to-income ratios, especially in areas with the highest home prices, keeping some out of the market for credit issues mentioned above while driving others into the market looking to capitalize on lower rates than they will be able to get for what may be a very long time.

The Bigger Picture

So, what does it all mean? Despite, the challenges to many hoping to enter the market as buyers this year, rising rental rates coupled with moderate growth in home prices and rising mortgage rates should drive a busier than typical summer buying season. However, lack of available homes in some areas will present an issue to many buyers.


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About The Author
Matty Byloos
Matty is the Content Marketing Specialist for Homes.com. He's a newly minted homeowner who currently lives in Portland, Oregon with his wife. When he's not working, he enjoys writing fiction, working on the house, and enjoying the amazing nature that the city has to offer. He is also the founder of NOVEL Creative Agency.
1 Comments
  • October 11, 2016 at 10:36 pm

    The Census Bureau released new residential sales data in August that shows that demand for housing is strong in spite of low supply.

    “Sales of new single-family houses in July 2016 were at a seasonally adjusted annual rate of 654,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 12.4 percent (±12.7%)* above the revised June rate of 582,000 and is 31.3 percent (±19.9%) above the July 2015 estimate of 498,000”

    http://www.shilozitting.com

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