2015 Housing Market Watch

Home Buying Predictions

We are over four months into the New Year, and the future of the housing market is looking bright. 2014 was the best year for the US economy since the recession of 2009. With the increase of jobs and average income, the forecast for this year looks good for homeowners as well as potential home buyers. We have some predictions for what’s in store for the housing market in the near future.

Millennials Will Buy Homes

Not all folks born between 1981 and 2000 are living with family as they struggle to pay off student loans. As the job market improves, many millennials are settling down and planning for their future. Millennials ages 25-34, make up 65% of first-time home buyers and are at the age when many marry and have families. This generation is larger than the baby boomer generation, and soon the market will begin to feel its impact.

Mortgage Rates Will Rise

Not all the effects from the improving economy will have potential home buyers beaming from ear to ear. On the other side of the coin is that mortgage rates will climb again. As banks no longer have to entice borrowers with low rates, be prepared for reasonable, yet higher rates. By the end of 2015, 30 year fixed mortgage rates should reach 5%. We predict that adjustable and hybrid mortgages will be much more in demand than fixed rate mortgages. If you are looking for the best rates, contact a professional mortgage expert today.

Credit- The Biggest Factor for a Home Loan

Many would-be home owners are stifled by strict qualification guidelines for bank loans. Many younger borrowers, and those with little or no savings will continue to have trouble getting loans. Access to credit has long been a major factor in procuring a loan. Contact the mortgage experts at MIG to learn more about credit and home loans. New policies by the Federal Housing Administration and top lenders Fannie Mae and Freddie Mac have loosened guidelines. If these new policies don’t make a big difference, it will become increasingly obvious that credit is still one of the biggest factors in qualifying for a home loan.

Foreclosure Crisis Ending

In 2014, there has been a major decrease in foreclosures across the country. It’s been seven long years since the foreclosures skyrocketed, but in 2015, we will see that come to an end. As we see numbers projecting good things to come for the housing market, housing is still a local business. Conditions are different for every neighborhood, each with unique trends and data.

The Home Buying Frenzy Will Lessen

Fading inventory and the decrease of investors in the housing market will slow down the buying frenzy of years past. Rising prices of homes will be less attractive for investors and they will slowly exit the market. Bidding wars and all-cash offers from these investors leaving the market will allow for a more balanced market.