Today is January 2 and it's the top of 2015! Happy New Year! The turn of each year causes many of us to reflect on the past, and plan for the future.
If you are thinking doing a real estate transaction this year, here are 5 real estate predictions for 2015 offered by Freddie Mac Economists. Taking these into account may assist you with your planning.
1. Mortgage rates: Interest rates will likely be on the rise this year. In recent weeks, the 30-year fixed-rate mortgage has dipped below 4 percent. But by the end of the year, Freddie projects mortgage rates to average 4.6 percent and inch up to 5 percent by the end of the year.
2. Home prices: Home appreciation will has slowed to 4.5 percent this year from 9.3 percent last year. Appreciation is expected to drop further to an average 3 percent in 2015. "Continued house-price appreciation and rising mortgage rates will dampen affordability for home buyers," according to Freddie economists. "Historically speaking, that's moving from 'very high' levels of affordability to 'high' levels of affordability."
3. Housing starts: Homebuilding is expected to ramp up in in 2015, projected to rise by 20 percent from this year. That will likely help total home sales to climb by about 5 percent, reaching the best sales pace in eight years.
4. Single-family originations: Mortgage originations of single-family homes will likely slip by an additional 8 percent, which can be attributed to a steep drop in refinancing volume. Refinancings are expected to make up only 23 percent of originations in 2015; they had been making up more than half in recent years.
5. Multi-family mortgage originations: Mortgage originations for the multi-family sector have surged about 60 percent between 2011 and 2014. Increases are expected to continue in 2015, projected to rise about 14 percent.