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5 REAL ESTATE PREDICTIONS 2015

By
Real Estate Agent with La Rosa Realty LLC 0684897

 

Expect the home-purchase market to strengthen along with the economy in 2015, according to Freddie Mac's U.S. Economic and Housing Market Outlook for November.

What's Coming in the New Year

"The good news for 2015 is that the U.S. economy appears well-poised to sustain about a 3 percent growth rate in 2015 — only the second year in the past decade with growth at that pace or better," says Frank Nothaft, Freddie Mac's chief economist. "Governmental fiscal drag has turned into fiscal stimulus; lower energy costs support consumer spending and business investment; further easing of credit conditions for business and real estate lending support commerce and development; and consumers are more upbeat and businesses are more confident, all of which portend faster economic growth in 2015. And with that, the economy will produce more and better-paying jobs, providing the financial wherewithal to support household formations and housing activity."

Freddie Mac economists have made the following projections in housing for the new year:

  1. Mortgage rates: Interest rates will likely be on the rise next year. In recent weeks, the 30-year fixed-rate mortgage has dipped below 4 percent. But by next 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: By the time 2014 wraps up, home appreciation will likely have 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 the new year, 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.

Source: Freddie Mac

Comments (5)

Les & Sarah Oswald
Realty One Group - Eastvale, CA
Broker, Realtor and Investor

Maria - very informative information for realtors to have and share with their clients. 

Welcome to ActiveRain!!! Looking forward to reading more of your future blogs and comments.

Btw...there are a lot of blank spaces between your blog's last sentence and the comment section. You probably need to go back to the post and delete some lines to avoid the empty spacings.

Keep up the excellent work!!! Much continued success in 2015!!

Jan 02, 2015 11:57 PM
Andrew Mooers | 207.532.6573
MOOERS REALTY - Houlton, ME
Northern Maine Real Estate-Aroostook County Broker

Long drop to the bottom on this big gulp of white space. Thanks for the crystal ball predictions.

Jan 03, 2015 12:00 AM
Richie Alan Naggar
people first...then business Ran Right Realty - Riverside, CA
agent & author

Yes to this being a pivotal year in many ways and applications too

Jan 03, 2015 12:05 AM
Pat Champion
John Roberts Realty - Eustis, FL
Call the "CHAMPION" for all your real estate needs

I always love to read and see what is expected for the upcoming year it helps me to prepare for my customer's. Thanks for sharing your predictions have a great weekend.

Jan 03, 2015 12:13 AM
Kevin J. May
Florida Supreme Realty - Hobe Sound, FL
Serving the Treasure & Paradise Coasts of Florida

It's enlightening to see concurrence in the multi-family realm MARIA MARRERO however the Orlando market might not experience that steep of a climb.

Jan 03, 2015 12:19 AM