The Experts Weigh In
As we start a new year, there is no shortage of predictions with regard to the real estate markets. Here is where the experts have weighed in:
Realtor.com®: Home sales are poised to zoom to the highest levels since 2006 next year, according to a 2016 housing forecast issued by realtor.com®. Gains in new-home construction and existing home sales are both expected to push total home sales to the highest levels in years. The new-home construction market is expected to see the most gains in 2016, with realtor.com® forecasting a 12 percent year-over-year increase in housing starts and a 16 percent year-over-year growth in new home sales.
Fannie Mae: “We see consumer spending as the biggest driver of growth moving into 2016,” said Fannie Mae Chief Economist Doug Duncan. “An uptick in average hourly earnings and low unemployment numbers are contributing to a positive outlook for consumer spending. The supply of existing homes remains lean, putting significant upward pressure on home prices. Meanwhile, we expect interest rates to rise only gradually through next year, and an improving income trend should help support affordability.”
Redfin: Housing projections for next year include slowing price increases and sales growth, easier credit, more first time homebuyers and continued inventory shortages. Redfin sees home prices increasing in the 3.5 percent to 4.5 percent range next year.
It looks like the consensus is for moderate real estate growth and moderate interest rate increases, with new home construction and first time buyers leading the way.
The Monday Market Update
Rates on home loans were little changed this past week. Freddie Mac announced that for the week ending December 24, 30-year fixed rates fell one tick to 3.96% from 3.97% the week before. The average for 15-year loans was unchanged at 3.22%. Adjustables were up slightly, with the average for one-year adjustables increasing one tick to 2.68% and five-year adjustables rising to 3.06%. A year ago, 30-year fixed rates were at 3.83%, a bit lower than today’s levels.
Attributed to Sean Becketti, chief economist, Freddie Mac –“Treasury yields dropped slightly as the holidays approached. Rates on home loans remained largely unchanged, with the 30-year fixed rate ticking down a basis point to 3.96 percent. As we mentioned last week, long-term interest rates will not spike in response to the Federal funds rate increase. While we expect the 30-year rate to be above 4 percent in early 2016, we anticipate rates will gradually increase, averaging 4.4 percent for the year.”
Rates indicated do not include fees and points and are provided for evidence of trends only. They should not be used for comparison purposes.