Experts are predicting that first time homebuyers, especially millennials (20-34 year olds), will be making a comeback this year as more favorable housing conditions arise. The improving labor market is also a plus as wages and job growth increase, allowing more potential buyers to save for homeownership.
Home values are expected to slow down over the course of the year but rent prices will continue to grow. This is one reason why more first timers will decide to make the move to homeownership. Builders are also planning on meeting the demand of today’s first time buyer by constructing less expensive homes, therefore adding to the housing inventory so there will be more homes to choose from.
The new 3% down loan program will also help get young renters out into the real estate market as it will be easier to qualify for a mortgage without the hassle of saving for a large down payment. Low mortgage rates will also help with affordability. Experts do believe mortgage rates will begin to rise throughout the year but the direction of rates is difficult to predict as there are so many factors that sway the market.