2015 Housing Predictions

2015 Housing Predictions

The housing market notably strengthened in 2014.

Moving into 2015, there are plenty of positive

predictions concerning the market and it may be the

year that the U.S. moves out of the slump instigated by

the bursting housing bubble in 2008.

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A look back at 2014

• Interest rates plummeted in 2014. Bankrate showed

rates fell under 4.5 percent from October 2014 to

December 2014.

• Fannie Mae and Freddie Mac both announced a 3

percent down payment option.

• Housing prices rise - October 2014 showed a 4.5

percent year-over-year increase according to

Bloomberg.

Millennials anticipated to pump

up the housing market U.S. News and World Report indicated the following obstacles are keeping this young generation from purchasing homes:

• Employment

• Mortgage attainment issues

• Student debt

• Lifestyle choices

Employment Improvements

Realtor Mag reported the job market improvement

means more millennials with the resources to

purchase homes. Employment for young professionals

between the ages of 25 and 29 has risen 3 percent.

Job security may lead this large demographic into the

housing market - ultimately bolstering its performance.

Mortgage-approval

Requirements Changes The loosening mortgage-approval requirements

offered by Freddie Mac and Fannie Mae eliminate

some of the obstacles associated with this generation

being approved for a home mortgage. In addition, The

Washington Post reported President Barack

Obama's announced plan to cut premium

fees associated with FHA home loans, which may

entice first-time homebuyers and encourage them to

enter the housing market in 2015.

Understanding Millennials

Providing affordable and attainable options partnered

with the changing needs of millennials in a stronger

economy may ultimately outweigh any current debt

and encourage this generation to purchase homes.

Housing market predicted to

normalize Forbes indicated price gains on houses rose at a slower rate in

2014. This trend is anticipated to continue in 2015. Factors

slowing price gains include:

• Housing inventory levels

• Investors exiting the housing market

• Shifted out of the recovery phase

Rent is on the Rise

• The Pierce-Eislen 2015 Multifamily Rent Forecast and

Outlook Report indicated the expectation of rent rising 4.5

percent nationally in 2015, according to Commercial Property

Executive. The rising rate is predicted to increase more

quickly than home values, opening up the potential for a small

boost in home affordability.

• Some millennials may wind up buying homes instead of

renting due to the difference between the two residential

options available to potential homebuyers.

Smart Strategies for Millennials

Contact Your Loan Officer Today

to Learn More About First-Time

Homebuyer Programs!