Spring is known as the most active season in the real estate industry. According to the National Association of REALTORS® 2016 NAR HOME Survey, Spring 2016 is no different with the report stating that 75 percent believe that it’s a great time to buy and 56 percent are content with selling.

With the majority of consumers agreeing that home buying and selling transactions are due to increase, real estate professionals are experiencing a very busy season. Here’s a closer look at the trends having the greatest influence on housing decisions this spring:

Overall outlook – Consumer perception of the U.S. economy weighs heavily on their propensity to purchase. According to the 2016 NAR HOME Survey, buyers are hopeful:

• 47 percent of people believe the U.S. economy is improving
• Six in ten people under 34 years of age believe the economy is improving
• Those who are renters and living with someone else are more optimistic than homeowners about the U.S. economy

Price trends – Buyers are pretty confident that prices will either rise or stay the same; 47 percent foresee a rise, 44 percent anticipate no change, and 9 percent expect home prices to decrease.

Mortgage weariness – There is a perceived level of difficulty when it comes to home financing. Overall, 63 percent believe it will be very difficult to somewhat difficult to secure a mortgage this year. There is strong correlation between mortgage weariness and household income with the majority of those making under $50,000 citing very difficult, those with incomes between $50,000 to $100,000 mainly viewing home mortgage acquisition as somewhat difficult, and the majority of those bringing in more than $100,000 perceiving home financing as not very difficult.

Location matters – Both those renting or owning prefer to buy in an area similar to their current living situation. In rural areas consumers are 68 percent more likely to purchase their next home in a similar area, while 75 percent of residents in suburban area would chose to move to a similar area. Conversely, younger consumers prefer urban areas whereas older buyers prefer a rural setting.

Size & type – Home size and type are top priorities for buyers and mirror their current lifestyle. Older consumers are interested in downsizing, while younger buyers see themselves in larger spaces.

First time buyer vs. mom and pop investors – According to realtor.com, first-time home buyers will continuously be outbid by investors. Reason being, “deep-pocketed investors are focusing on the most affordable segments of the market: smaller homes in both suburban and urban areas.” Investors offer sellers more cash for their home without having to rely heavily on securing mortgage loans, which makes it difficult for first-time buyers to compete.  

It’s imperative for real estate professionals to understand how movements within the market will impact clients and how being equipped with the necessary knowledge and tools can help them succeed.

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