Market News May 24

Market Updates

Best Metro Markets for First-time Buyers


Recent research found that some metro areas are particularly attractive to first-time buyers this year. In addition to lower pricing for starter homes, these cities offer other positives like higher percentages of peer groups living nearby and fewer bidding wars.

  1. St. Louis
  2. Detroit
  3. Minneapolis
  4. Indianapolis
  5. Austin
  6. Pittsburgh
  7. San Antonio
  8. Birmingham
  9. Kansas City
  10. Baltimore
Top two markets St. Louis and Detroit score well in terms of overall affordability. In addition to more reasonably-priced homes available to buy, these markets score high in the rental affordability category. This helps renters fast-track their savings strategies for a down payment.

While Austin, Texas isn't the cheapest housing market on the list, it ranks first in the number of similar-age households. This helps newcomers find new friends, both at work and within their neighborhood. This enhances the overall enjoyment of home ownership.1

Younger Generations Buying Up Homes in Industrial Metros


Even though home purchase numbers are dropping in some areas, this hasn't stopped members of Generation Z (18-27) and Millennials (aged 28 to 43) from buying homes. Last year, two out of five new mortgages were approved for buyers under 35, while 27% went to Millennial buyers aged 35 to 44.

Some agents have noticed that younger buyers are less fazed by higher mortgage rates than older generations, although some Boomers are bound to remember when rates hit 18.63% in 1981. Gen Zers and Millennials have also had time to save up a down payment, and many need a larger home for a growing family. Many consider real estate a safer place to park their money than the stock market.

Areas within the unflatteringly-nicknamed Rust Belt (formerly the Steel Belt) are especially popular with younger buyers. Nearly half (48%) of new mortgages issued in Pittsburgh went to buyers under 35, the highest share of the 50 most populous U.S. metros, followed by Cincinnati (46.5%), Philadelphia (46.3%), Detroit (46.1%) and Warren, MI (46%).2

Win Buyer Kudos with Assumable Mortgages


If today's higher interest rates have sidelined some of your prospective buyers, it's time for a refresher course on assumable mortgages. While relatively few mortgages are truly assumable, having one or more in your listings helps guarantee plenty of buyer interest.

Here are some basics to remember:

  • Only government-backed loans like FHA and VA loans are assumable, although conventional mortgages may be assumable during specific circumstances, such as a spouse assuming one during a divorce settlement.
  • When a qualified buyer takes over the seller's loan, this will include the interest rate, payment schedule and loan balance.
  • A buyer will probably need a large down payment to qualify. Here's why: if someone is buying a house for $400,000, taking over the seller's assumable mortgage with a $300,000 balance, the buyer would need to cover that $100,000 difference.
If you have questions about these or any other mortgage program, feel free contact me to learn more.3

Sellers Can Rake in ROI With These Righteous Remodels


Even with inventory shortages still plaguing some metro areas, sellers who are preparing their homes for viewing may ask you if it's worth carrying out any remodeling. This can be tricky, as high-dollar projects such as a kitchen remodel may delight the owner, it may not deliver the return on investment (ROI) a seller may expect.

A recent survey found that home improvements to attract buyers often accentuate curb appeal while maximizing ROI, with four out of the top five improving a home's exterior looks. Better yet, the #1 performer—garage door replacements—is the cheapest, too.

Top ROI remodels #2 through #5 are as follows:

  • Replacing an entry door with an updated steel door
  • Replacing siding with stone veneer
    • Upgrading a traditional front entrance with sidelight windows A minor kitchen remodel with cabinet refacing, new appliances and new countertops
You may want to share this intel with sellers if their home's exteriors look tired or dated. Other upgrades popular with buyers include new roofs and HVAC systems. And, as you know, a thorough declutter of a home is well-worth the time and effort invested.4

Why Add Floor Plans to Listings?

If your listings always include a detailed, accurate floor plan, congrats! These are popular with online home shoppers and can make your listings stand out. Here are additional reasons for adding a detailed floor plan:

A 3D house tour can become a mental overload for a shopper, especially if they've just completed several others. In addition, not all 3D shoppers can visualize a property's layout by viewing a tour. A 2D floor plan, combined with professional photos of a property, helps buyers easily see the entire picture.

Providing a floor plan enables buyers to see how each room "relates" to each other within a home. This helps them determine the comfort and usability of each room.

Buyers who have outgrown their current home will appreciate how easy it is to compare a listing's room sizes with their current home. This helps them create a shortlist of listings that are just right...not too big or too small.5

Sources: 1zillow.mediaroom.com, 2redfin.com, 3nbcwashington.com, 4cnbc.com, 5cubi.casa