Whether you currently own a home or are planning to buy or sell one, homeownership comes with its own unique challenges. Some challenges are ever-present but others shift over time as trends ebb and flow.
As the top provider of residential title insurance and closing services in Missouri, Investors Title Company stays on top of the latest housing market trends. Let’s take a look at how today’s market can impact your homeownership experience.
Increase in Homeownership
In 2018, 64.4 percent of U.S. households — or an increase of 1.6 million homes — were owned as opposed to rented. Household budgets are the strongest they’ve been in four decades, so it’s unsurprising more individuals are able to afford buying homes today.
The number of residential properties sold in Missouri for 2019 year-to-date is 21.8% lower than the same time period in 2018. Interestingly, however, the median residential property selling price for 2019 YTD is 6% higher than in 2018 according to MissouriRealtor.org’s report. So, while sellers’ homes may spend a bit longer on the market, most can reasonably expect to get a good offer on their property thanks to the lift in household income.
Fewer New Construction Homes
Though more people are buying and owning homes, home construction is the lowest it’s been since 2012. Interestingly, roughly 25 percent of new construction homes had a price cut in the fourth quarter of 2018 vs. the first quarter.
Rising Mortgage Rates
By the end of this year, mortgage rates will likely be at 4.9 percent. While this may make some nervous, mortgage rates are still at an all-time low, especially when you consider the 18 percent rates found in 1981.
Slipping Home Sales and Slowing Home Price Growth
Though more individuals are owning homes, the sales themselves are decreasing nationally. This could be because of an increase in competition for the minimal amount of homes that are available. 5.5 million existing residences were sold in 2017, but that number dropped to 5.3 million last year.
Home prices are still increasing – just not at the rate they were previously. Home price appreciation was 6.5 percent at the start of 2018 and slowed to 4.6 percent at the end of the year. The median home value in Saint Louis is $117,900. Home values have declined marginally over the past year, according to Zillow, and are predicted to drop -0.7% next year. $164,900 is the median price of homes currently listed in St. Louis, while the median closing price of homes is at $142,500
The Seller’s Market Is Hot In St. Louis
Zillow reports that the seller’s market is “very hot” right now. (The market temperature reported by Zillow is based on list-to-sale price ratio, the prevalence of price cuts on listings, and time-on-market, and is meant to provide information on the current balance of bargaining power between buyers and sellers in the region.)
For much of 2019, the market has favored sellers, making it a good time to try selling your home if it’s something you’ve been considering for a while. That doesn’t necessarily mean that it’s a bad time to buy, though. With a strong job market, increasing wages, low mortgage rates and a fair economy, 2019 has been a good year for buyer power. And, unlike some other major cities, St. Louis is not plagued by limited inventory and high prices.
Greater Opportunity in Smaller Cities
Big cities continue to become less affordable. Buyers are learning that if they move outside of those cities to faster-growing midsize and smaller cities like St. Louis, they may have more success in securing a reasonably priced home. The low cost of living in our region has been an increasing draw for transplants. Average housing costs nationally amounted to $227,025 in 2018, while St. Louis came in at just $157,725, meaning that buyers here can get far more for their money than they would in cities like New York, San Francisco and even Chicago.
With our strong job market (and tech job growth in particular – Missouri is projected to see a 2.9% growth in tech jobs, outpacing the U.S. expected growth rate of 2.1%), good schools, family-friendly atmosphere and the wide variety of free activities, St. Louis is growing in national popularity.
At Investors Title Company, we’re committed to making you the most informed homeowner (or future homeowner!) you can be. For more information, take a look at our resource library. Our homebuyer’s guide, seller’s guide, and other helpful resources are designed to give you the knowledge you need to feel confident and well-informed throughout the entire selling and buying process.
And, when you work with the best title company in St. Louis, you’ll feel comfortable making a decision about your future or current home knowing that our title insurance and closing experts are working right alongside you to ensure you have a smooth process and successful closing!
Have additional questions about our residential title services? Contact Investors Title today