2015 Predictions for the Real Estate Market
As we come close to the end of the year, many would be thinking or planning of either buying or selling their property. Just like any other major decisions, one should not be hasty. Would the real estate market be prolific by the next year or would you rather leave it for the time being?
It looks like the US economy is getting stronger and more stabilized which means that there will be more stable income and jobs for potential homebuyers. Here are some highlighted predictions or outlook about the US real estate market by the year 2015:
Interest Rates – expect to see a climb in numbers throughout the year 2015. With the yields on the 10 year Treasury averaging from 2.6 percentage points in 2014 up to 2.9 percentage points. In terms of mortgage rates, a look on 30-year old fixed mortgage will climb gradually with a median number of 4.6 percent up to 5 percent by the end of next year.
Appraisal rate - for home value will be slowly and steadily be at 3 percent instead of the previous 6 percent. This is good news for anyone who is planning to invest or purchase a home or property by next year, however for home sellers; it could be such a hurdle. The numbers are a huge setback for investors but it is for potential homebuyers as there will be a balanced market. With the investors out of the home buying picture, the real estate market or home buying process will be easier for traditional buyers. Previously, we have seen activities where investors proposing to buy a property in cash at a lower price and selling it a higher price, making it difficult for traditional buyers to compete.
Housing starts – homebuilding is projected to increase by up to 20 percent from this year. This will help to increase sales of about 5 percent, which is the best sales pace for the past 8 years.
Single-family originations – will drop an additional 8 percent from 2014 to 2015 to $1.1 trillion annualized as increases in purchase-money lending are not sufficient to offset a drop in refinance. Refinance is expected to make up or cover just about 23 percent of originations in 2015.
Multifamily originations – mortgage originations for the multi-family sector have seen an increase or surge for up to 60 percent between the year 2011 and 2014. Thus, this increase is also expected to continue in 2015 for about 14 percent up from 2014.
Millennial buyers – Many Gen Yers are now seeking for stability and start a family. This will push or encourage more homebuyers from that market which is expected to see by the end of next year. The next year seems to be a pretty much strong market for home buyers since the largest demographic in the U.S. consists of 23 year old Americans who will be starting their own family and look to buy their own homes.
Baby boomers – This is in fact good news for those who are selling their homes, many are looking to move to another place because they wanted to be closer to their grandchildren or son or daughters. This will leave them in the position to sell their home.
Mortgage eligibility –Freddy Mac and Fannie Mae are the industry’s leaders, and they have recently announced a new mortgage program for buyers with a down payment for as low as 3 percent. This will also help more potential home buyers to qualify for a home loan as issues such as foreclosures or short sales age out of their credit reports, thus easing their mortgage eligibility. The 2 industry leaders are now saying that it is okay to lend to people who don’t have 5 percent down and okay to extend credit in a reasonable and safe manner.
Now there we have it, the expected highlights and forecast for the real estate market in 2015. It could have a positive or a negative effect but that will still be based on how you see yourself, if you are a homebuyer – it could mean great due to the fact that interest rates are not expected to surge high and if you are selling your home – it could mean that there are many potential buyers for your property. It is just a matter of how you see the glass – half full or half empty.
If you foresee yourself looking to buy or sell a home in 2015, Contact me to see what I can do to fulfill your real estate needs.
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