Homes are being sold too quickly for interested buyers to bite.
Competition is fierce if you want to buy a home this year.
“Average days on the market across the country are extraordinarily low, especially in certain hot markets,” says Nationwide senior vice president and chief economist David Berson. “When you factor in the nationwide trend of rapidly increasing prices, it’s going to be a more difficult market for homebuyers this year.”
In this roundup, we go over the current real estate market. From the hidden costs of selling your house, to older homeowners’ rising wealth.
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A seller’s market
The demand for homes is making real estate more profitable for interested sellers.
“As we head into spring and the traditional season when sales heat up, buyers will find that desirable homes won’t be on the market for long,” Berson says. “Today, the average home is on the market almost half the length of time that it was six years ago. Of course, that is good news for people looking to sell their home.”
Good news for sellers, but bad news for interested purchasers – especially first-time buyers, who are currently renting. Rents have risen at their fastest pace in nearly two years.
The median rent – the rent cost between the highest and lowest – increased nearly 3 percent (2.8 percent), which is the fastest pace since May 2016, says a report from Zillow. Making it tougher on renters who are prospective homebuyers.
“Rental appreciation slowed between 2015 and mid-2017, but is once again picking up steam, reaccelerating over the past nine months,” says Zillow senior economist Aaron Terrazas. “For-sale inventory is tight, and with home prices continuing their rapid climb, it’s becoming more and more difficult for renters to become owners, forcing them to rent longer than they otherwise would have.”
Despite the good news for those interested in selling, home sales hit their lowest point in nearly four years at the beginning of this year, according to CNBC. There has also been an increase of homeowners staying put at a record high. The average homeowner now lives in their home 10 years, which is the longest realtors have noticed since they began tracking in 1981, CNBC reported.
But who’s staying in their home the longest?
Senior’s newfound wealth
Home sales are down 5 percent, and one group to blame? Baby boomers, NBC has reported. They’re staying in their homes longer, limiting inventory for younger buyers to purchase starter homes.
As older homeowners stay put in their homes longer, their home equity is increasing. For older baby boomer homeowners, 62 and older, their home equity has risen to $6.6 trillion, according to the National Reverse Mortgage Lenders Association (NRMLA). That’s the total of all seniors’ home wealth in the U.S.
The home equity is the portion of a home that homeowners truly own. It is the asset to owner.
“Today’s retirees are more likely to leave the workforce with a mortgage and other debts that can put stress on monthly cash flow,” says NRMLA President and CEO Peter Bell. “In these situations, financial products that convert home equity to cash could be used to pay off revolving debt from credit cards and reduce or defer monthly mortgage payments.”
To anyone who is interested in selling their home, they may be surprised to find out how much it will cost them this year.
The costs of selling your home
Selling a home this year? Budget to pay at least $18,000 before you hand over the keys.
It costs U.S. homeowners $18,342 on average to sell their home, according to a joint survey from Zillow, and Thumbtack, an online site that matches customers to various professionals. The survey concluded that because 61 percent of sellers in 2018 have never sold a home before, it’s likely they’ll overlook many of the costs.
Most sellers (78 percent) make at least one home improvement before selling their home. Sellers end up spending nearly $5,000 on average on basic home preparations before listing their home on the market.
What sellers spend on
- carpet cleaning
- lawn care and gardening
- local moving
Not to mention the fact that homeowners are responsible for paying real estate agent commissions and sales tax. Sellers spend $13,357 on average for both of those costs.
“While there could be some initial sticker shock associated with the costs of selling a home, investing in home improvement projects like painting and home staging often proves to be very valuable in the long-run,” says Lucas Puente, economist at Thumbtack. “Homeowners starting to think about selling should take time to research and budget for the projects that can ultimately help sell their home faster and at a higher value.”
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Article last modified on April 27, 2018. Published by Debt.com, LLC . Mobile users may also access the AMP Version: Homes Are in Demand, But Nobody’s Selling - AMP.