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.
3. 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.
4. 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
5. 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.
6. 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.
7. 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.
8. 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
9. 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.