Student loan debt is up to 7% of the GDP, second only to mortgage debt. Of those who have student loans, 10% have defaulted. That means that there are fewer people buying a home after graduating from college.
This trend is going to continue for quite some time I believe. With an upcoming election and the guarantee of a new president, interest rates will be rising soon. Rising interest rates reduce purchasing power which further impacts the first time home buyers.
I believe the market is going to begin its shift toward a more neutral market in the coming months. We are going to see potential home buyers get frustrated and get into long term leases. Small rises in interest rates that cause some first time homebuyers to lose the ability to buy what they were looking for. It will also prevent some homeowners from being able to upgrade to that next level.
While I don’t really believe the market has peaked quite yet, if you’re trying to upsize or downsize you don’t want to do that at the peak of a sellers’ market. You want to do that on the rise because the value in your current home is up and the value of the home you buy will increase after purchase.
All things considered, if you are thinking that selling in the next 12 months is a possibility, this fall/winter is a great time to sell!