Mid-Sized Cities on the Rise: Navigating Millennial Migration Trends | 1-Minute Market Update w/ Martin

Is the housing market truly in flux, or are we merely witnessing a new normal? In this compelling episode, we promise you’ll gain a deeper understanding of the dynamic shifts happening in mid-sized cities across the U.S. We dissect the latest housing market data, revealing a paradox of increased inventory paired with escalating prices and interest rates. Despite these hurdles, there's a noticeable uptick in mortgage applications and online home searches. Tune in to discover strategies for overcoming these affordability challenges, including the benefits of larger down payments and government-backed loans.

Why are millennials gravitating towards cities like Austin and Raleigh instead of traditional metropolitan hubs? We explore this trend, driven by factors like affordable housing and burgeoning job opportunities. Mid-sized cities such as Fayetteville, Des Moines, and Madison are seeing a significant influx of young professionals, reshaping their local housing markets and economies. We delve into the economic and lifestyle incentives drawing these new residents and discuss what this migration means for the future of these cities. Prepare to gain insights that could influence your own real estate decisions in the coming months.

Transcript

Speaker 1: 0:01

This week, find out what mid-sized cities are thriving in the multifamily space. But before that, let's take a look at this week's housing market data. The housing market is kind of weird right now. More houses are available, but they're also more expensive. Interest rates are kind of high, so monthly payments are higher too. But let's break that down. The number of people seeking mortgages has increased by 1% week over week and by a more substantial 2% year over year. This suggests growing interest in homeownership. Google searches for homes for sales have risen by 4% compared to the previous month. However, this figure is down by 4% year over year. However, this figure is down by 4% year over year, indicating a potential slowdown in buyer activity. The average asking price for homes has reached a new high of $399,750, surpassing the previous record of $384,784. Yikes, that's a significant increase. Yikes, that's a significant increase. Interest rates remain elevated at 6.09%, resulting in higher monthly mortgage payments. This is a significant barrier for many potential buyers. The number of homes available for sale has increased by 7.6% year-over-year, providing more options for buyers. More options for buyers. However, the average time on the market has lengthened to 38 days, suggesting that even with increased inventory, finding the right home can still be competitive.

Speaker 1: 1:33

The housing market is in a state of flux, with positive and negative indicators emerging. While increased inventories and rising mortgage applications are encouraging signs, affordability challenges posed by high prices and interest rates are likely to persist. Potential buyers may need to be prepared for a competitive market and consider strategies to overcome affordability hurdles, such as larger down payments or exploring government-backed loans. Larger down payments or exploring government-backed loans Now I think we're going to see an even bigger increase in mortgage application. I think this winter is going to be a pretty strong winter for real estate, as mortgage rates continue to go down. The feds are talking about lowering the rates another 1% this year before the year's over, so this is going to heat up the housing market now. Real estate is a slow moving train, so it will take a little bit of time before this information gets to the buyers in the streets right for the regular consumer to get this information that interest rates are coming down. But it will get out there and when it does, we're going to see a surge in demand happening over in the multi sector.

Speaker 1: 2:45

Looks like a bunch of millennials are ditching big cities. A recent report by Placerai shows that five mid-sized US cities have experienced a significant increase in young professionals over the past four years. These cities Austin, texas, fayetteville, arkansas, raleigh, north Carolina, des Moines, iowa and Madison, wisconsin have seen a net influx of residents drawn by factors like affordability and job opportunities. One key trend noted on the report is that income gap between these destination metros and regions where new residents are coming from, and age is another factor influencing this migration. In most cases, the median age to incoming residents is younger than the existing population. Placerai attributes this migration pattern to two primary factors more affordable housing options compared to larger metropolitan areas, making them an attractive destination for young professionals seeking economic stability and better quality of life.

Speaker 1: 4:00

When looking to borrow money like homebuyers, college students, business owners rate were high, making it harder to afford things like homes. Now they're lower, which could make it easier to buy home. However, home prices might not go down right away. I don't think they're going to go down at all. Actually, in my opinion, these are a lot of people who want to buy homes and there aren't enough homes for everyone, right? So inventory is low. We've been talking about this on this podcast for a while now. Population has exploded over the last four years, so I don't think we're going to see a loosening of prices. This could keep prices high. Plus, when rates go down, homeowners who already have low rates might not want to sell their homes. This means there won't be as many homes for sale, which could also keep prices high. Prices are definitely going to maintain high.

Speaker 1: 4:54

There are some people in this space that say a crash is coming. A crash is coming. I'm not in that camp. I don't believe a crash is coming. I believe that this is the new lock point. This is a new normal. We might see a little bit, maybe 10, 12%, but not a 25, 30% dip. I don't believe that that's going to happen. It might be a little bit of a dip, but I don't see it.

Speaker 1: 5:18

The only way a crash would happen is if we go into a deep recession. So if we go into a deep recession, remember what drives real estate is employment. So if employers start to do massive layoffs across the country and across all sectors, then we might see a crash. Because, remember, you're not making money. It doesn't matter how low the interest rates go. Your interest rate could be zero, but if you don't have income, you can't even pay a loan with a 0% interest rate, right? So unemployment is a thing we all have to be paying attention to, and if we start seeing unemployment start to skyrocket, then we'll have a problem. You want to know more if refinancing is for you, or maybe you're just interested in starting your journey to financial freedom through real estate investing. Check out wwwmartinariamasterycom and let's get you started and that's a wrap in this week's real estate market update. Peace out.