Low interest rates and a recovering economy have led to fantastic growth in the real estate market over the past two years. Some markets have rebounded better than others. Now that interest rates are creeping back up, buyers are concerned with how this will affect the real estate market as a whole. Let’s take a look at the nationwide real estate trends for the first quarter of 2018.
Nevada, Texas, Florida, Utah and Colorado are the best markets in the country for the First Quarter of 2018. Nevada continues to be a reasonably priced location to live from housing to food, gases, and no sales tax. Texas has home prices going up as commercial growth stimulates more people moving into the state. Florida continues to be popular for its warm weather and ocean lifestyle while remaining a cost-effective place to live, particularly for retirees. Similar to Texas, Utah commercial growth has created a surge or house buyers into the communities as people relocate for better jobs. Denver is the center of growth in Colorado with the new G Rail line making commuting from the outskirts into the thriving Denver business district easier.
Interest Rate Effects
Unless you were in a bubble, you know that interest rates rose in the First Quarter of 2018. Concerns about rising interest rates mean that homes will be less affordable because a $300,000 home last year would cost more in financing in 2018. While some markets have seen a leveling of pricing as the rates have started to rise, other markets are still experiencing growth. To fully understand how interest rates will affect how much home you can afford, talk to your real estate agent or lender in Port-Elizabeth. It seems the market is still enjoying growth in areas where business is strong and wages have risen to keep pace with interest rates.
New Jobs Help Buyers
Job reports continue to show that more new jobs are being created and unemployment rates continue to be at all-time lows for all demographics. This is a good indicator of the housing market as families who weren’t working now have greater optimism about not just getting a job but finding a better-paying opportunity to support their families.
Rental rates in most big cities have not dropped during the First Quarter of 2018. This means that when given an opportunity to buy or rent, it remains cost effective for many to buy a home and build equity rather than pay rent that equals a mortgage payment. If rental rates remain constant, the likelihood of more renters looking to buy should continue to increase.
Overall Market Trends
Based on all indicators, the real estate market continues to be strong in the First Quarter of 2018. As the economy continues to recover, the major concern is the rise in interest rates. As long as jobs continue to grow and the unemployment rate continues to remain low, consumers are looking at long-term opportunities in rising markets. The hottest markets will continue to be areas where development and commercial growth continue to stimulate relocation and growth.