Wednesday, May 4, 2022 / by Sofie Langhorne
As demand for homes continues to rise, it's essential to understand what's driving this increase. According to recent data, several factors contribute to higher demand, depending on the needs of each buyer. With the Covid pandemic dramatically impacting people's lives worldwide, it has created an opportunity to rethink their priorities when choosing a home. So what does this mean for sellers? It's more important than ever to stay ahead of the market and learn how both buyers and sellers can take advantage of this very competitive market.
The Millennial generation is driving the demand for more housing options
This cohort of young adults has become more active in the homebuying market and is looking for additional housing choices that better suit their needs and unique lifestyles. This generation is the largest group of homebuyers in the market today and has been since 2014, according to the National Association of Realtors (NAR).
As the Millennial generation grows in both size and purchasing power, their preferences and priorities are driving a shift in demand for home buying. This generation is increasingly placing greater value on home spaces that can be used for work or play and lifestyle amenities like outdoor living areas and smart technology. In addition, many Millennials are also working remotely, often from home, which has contributed to a rise in demand for home offices. All of these factors have thus led to a growing interest in modern housing options that cater to the needs of this increasingly influential generation. Whether you are a home buyer or an industry professional looking to stay one step ahead of the market trends, it is essential to understand the role that Millennials are playing in shaping the housing landscape. After all, they represent over 25% of today's purchasing power and will continue to drive the demand for new housing options well into the future. So if you're looking to gain an edge in this competitive real estate market, keep your eye on what Millennials want and be prepared to provide them with satisfying homebuying experiences that meet or even exceed their expectations. Because at the end of the day, it is clear that this dynamic segment of buyers is defining how we live now - and tomorrow.
The Baby Boomer generation is downsizing and selling their large homes
According to new data, homebuyers over the age of 55 are increasingly choosing to downsize and sell their large homes. The trend appears to be driven by a desire for a simpler lifestyle, closer proximity to loved ones, and retirement.
The traditional family home no longer suits the needs of many Baby Boomers. Instead, they are opting for smaller homes that are easier to maintain and more economical to keep up. In some cases, this may mean moving closer to family members or friends who can provide support as they age. For others, it may simply be wanting to live in a less hectic and more manageable environment.
Of course, retirement is also playing a role in the downsizing trend. As Boomers enter their golden years, they often find that they no longer need the same amount of living space when they were raising a family. Selling their home can free up additional funds they can use for travel, hobbies, or other pursuits during retirement.
Demand for multigenerational housing
Multigenerational housing is a growing trend in today's society, as more and more people seek to live together for various reasons. One of the key benefits of such housing arrangements is the financial benefit of pooling together multiple homebuying budgets. Since one household may have greater purchasing power than an individual, families can often afford to buy a larger or more expensive home when they live together. Furthermore, sharing household caregiving duties can also help save time and resources, especially as family members grow older and their needs change over time.
Beyond financial considerations, multigenerational living also offers many social benefits. By living closer to other family members, people can strengthen existing relationships and forge new ones, connecting deeper than they might if they lived separately. In addition, the shared space often leads to increased cooperation and mutual understanding among family members of different ages and backgrounds.
Buyers are motivated to beat rising mortgage rates
As homebuyers are well aware, mortgage rates have been steadily rising over the past few months. This has led many buyers to become more motivated than ever to beat these rising rates and lock in a home purchase while they still can. Between fluctuating home prices and rising mortgage interest rates, it can be difficult for buyers to predict how much they will have to spend on their purchases. In order to minimize the impact of these changes on their homebuying experience, buyers are often motivated to act quickly and avoid waiting until market conditions become more favorable. Whether they need to get into a home before prices rise even further or lock-in current rates before they go up again, homebuyers are always looking for new ways to stay ahead of the competition. Ultimately, this need for speed can drive homebuyers to make difficult decisions and take risks they might not otherwise consider. But with careful planning and expert guidance at every stage of the process, homebuyers can successfully navigate these challenges and achieve their dream of homeownership.
Buyers want to escape rising rents
Renters across the country are increasingly finding themselves priced out of the places they call home. As rents continue to rise, many are switching to homeownership to take advantage of stable monthly payments and build equity over time. In order to escape the cycle of watching their hard-earned rent money go up in smoke, many renters are reconsidering the path of homeownership. By taking this step, they are moving towards building equity in their own property and wealth rather than their landlord's.
Rental price appreciation puts a pinch on the renter's wallet and has no benefits for them. On the other hand, home price appreciation pads the homebuyer's pocket by growing the value of their investment. Therefore, renters realized that buying a home is generally a better option than renting if they want to build their wealth through real estate investment.
Homeownership is a rewarding experience that provides many benefits, both financial and non-financial. This has driven the demand for homes to skyrocket in recent years, as more and more people are eager to achieve the stability and security homeownership brings. However, because of this high demand, sellers have the favor on their side. If you're thinking of making a move, don't hesitate to reach out for more tips and advice – we'd be happy to help!