5 Real Estate Predictions For 2015

Dated: 11/19/2014

Views: 271

Daily Real Estate News | Tuesday, November 18, 2014
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
Blog author image

Jeri Patrick

In today’s complex and difficult real estate market you need a professionals who will do whatever it takes to market and sell your home. Jeri Patrick has a team with an established history of succes....

Want to Advertise on this Site?

Latest Blog Posts

Mar 16 2018 5018 1

The Cost of Waiting: Interest Rates Edition [INFOGRAPHIC]Some Highlights: Interest rates are projected to increase steadily heading into 2019. The higher your interest rate, the more money you

Read More

Mar 15 2018 5018 1

Moving up Is MORE Affordable Now Than Almost Any Other Time in 40 YearsIf you are considering selling your current home, to either move up to a larger home or into a home in an area that better

Read More

Mar 14 2018 5018 1

7 Factors to Consider When Choosing A Home to Retire InAs more and more baby boomers enter retirement age, the question of whether or not to sell their homes and move will become a hot topic. In

Read More

Mar 13 2018 5018 1

You Can Save for a Down Payment Faster Than You Think!Saving for a down payment is often the biggest hurdle for a first-time homebuyer. Depending on where you live, median income, median rents, and

Read More