The real estate market is changing as it adjusts to high demand with low levels of inventory. Here are the five real estate trends to expect this February. Hint: it’s not a slow season!
Real Estate Trend #1. Decrease in housing affordability
Mortgage rates are rising again and quicker than expected. According to Freddie Mac, 30-year mortgage rates are now at 3.56%, up from 3% just a few months ago. First American, a title insurer, also reported that the typical house is 21% less affordable than a year ago. These factors can leave out some homebuyers as everything increases.
#2. Increase demand as homebuyers want to make a purchase before interest rates rise again
As stated, mortgage rates are rising, causing another buying frenzy as homebuyers try to lock in a low mortgage rate. The Mortgage Bankers Association reported that home applications to purchase a home increased 8% at the end of January. Buyers are aware of what’s happening and are trying to buy.
#3. Increase in rents
The third real estate trend is rent. Mortgage rates and home prices aren’t the only things increasing in real estate in February. A new study analyzed the average monthly rent in the United States. It found that monthly rent has increased by 14.1% nationwide and 40% in Austin, making it the #1 city with the highest rent increases. The average rent payment in Austin is $2,290. ATTOM Data Solutions even reported that it’s more affordable to own a home in 58% of U.S. markets than renting.
#4. Cryptocurrency funding real estate purchases
Crypto is becoming more common as Millennials and Gen Zer’s join the real estate market. Not only are they buying and selling crypto to fund their homebuying purchase, but there is such thing as a crypto mortgage now. Milo is a new program that lets users leverage their crypto holdings (instead of selling them) to buy a house. A press release from the company confirmed there’s a long list of buyers wanting their service.
#5. No new foreclosures
The last real estate trend concerns foreclosures. With eviction memorandums expiring in the past couple of months, many expected to see a large wave of foreclosures. It hasn’t happened yet, and it’s doesn’t seem likely. ATTOM Data Solutions reports that foreclosures were down by 8% in December. That‘s the second month in a row of declines in foreclosures.
These real estate trends are happening in Austin, and now is the time to buy! Take advantage of the low mortgage prices and buy while you can. If you need help navigating this fast-paced real estate market, contact us!