Over the course of the last few years, rising home prices have all but closed off the new-home market to young buyers. But will 2016 change all that? Many economists believe so, and it will start with a more affordable starter home brought to you by new home builders such as Bill Beazley Homes.
Affordability and value are expected to be hot ticket items in 2016, especially for millennials purchasing a starter home. The general consensus among experts is that millennials will stimulate the housing sector as they enter homebuyer age. Millennials made up the largest population for the second year in a row, and they are expected to do the same in 2016, providing a much needed boost in the housing market.
Growing confidence in the housing market, combined with new initiatives and shifting priorities will be factors in the revival of the affordable starter home. New home builders will play a major role as well, unlocking major homebuyer potential in 2016. Here’s how.
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New Home Builders Cater to Entry-Level Buyers
Bill Beazley Homes has always remained loyal to their first time homebuyers, building high quality, affordable housing throughout areas of Augusta, GA and Aiken, SC. However, in 2016, several more companies will be jumping on the bandwagon.
In the past few years home builders across the United States have had to deal with higher land costs, limited labor, and concerns about the demand of the entry-level market. Following the recession builders focused on developing larger more profitable homes while the housing market recovered. We saw a shift towards constructing higher priced, “move-up” homes. However, faced with surging home prices and the demand for more affordable homes, homebuilders are beginning to change their ways again. It is anticipated that In 2016, new home builders will likely shift to more affordable entry-level homes to meet the rising demand among millennials.
In the past, few builders targeted the lowest price ranges because communities with those types of homes would be most vulnerable should there be a downturn. But as the economy has significantly improved over the past 5 years, the push to build bigger is beginning to slow, and once again homes at affordable price points are becoming more available. This is great news for first-time homebuyers.
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Growing Confidence Among Home Buyers
In addition to this shift among new home builders there is also a growing confidence among new home buyers. With improved job security and a diminishing unemployment rate home buyers are more confident purchasing a home then they have been in the past several years. According to the Bureau of Labor Statistics, the U.S. unemployment rate dropped to 5.3% in June 2015. That’s a sizable improvement from the 10% jobless rate we saw in 2010, following the recession. In short, there are more jobs to go around these days, and this puts more people in a position to buy a home. According to TD Bank’s third annual Mortgage Service Index, half of millennials surveyed said they are either very or extremely likely to purchase a home within the next year.
New Loan Initiatives Help Borrowers Get Approved for Starter Homes
In 2016 mortgage giant, Fannie Mae plans on making it easier for qualified borrowers to receive a loan. Households have come a long way since the depths of the recession, and underwritings are starting to reflect the improvements, opening the door for more borrowers to receive a loan. Perhaps even more significant, loan requirements should ease further in the coming year, allowing more people to qualify for loans in 2016.
Bill Beazley Homes is the leading homebuilder in the Augusta, GA and Aiken, SC area. We’ve been building affordable starter homes for our first-time home buyers for over 40 years, and we will continue to build them in 2016. We have beautiful homes available right now as low as the 130’s! And may include features like hardwood floors and fireplaces, it will be hard to imagine you’re in a starter home at all! If you are interested in purchasing a new home in Augusta, GA or Aiken, SC, call us today or contact us here. Our new home specialists will walk you through every step of the process.
Bill Beazley Homes can be reached at 706-863-4888.