Home sales across the greater Wasatch Front and all around the country were slowed in 2014, in large part by a shortage of properties on the market. That same dynamic pushed home prices much higher in many areas, even leading to multiple offers and bids over asking price for some homes.
But as we begin 2015, many industry experts are forecasting a more balanced and normalized housing market, one that sees home sales rising once again and price increases moderating as more homes come on the market for sale.
If the forecasts hold true, this could be welcome news for potential homebuyers, many of whom may have missed out on purchasing last year due to limited inventory, rising prices and bidding wars in some communities.
Nationwide, the National Association of REALTORS® expects that existing home sales will be higher this year and prices will remain at a “healthier level of growth that should benefit both buyers and sellers.”
Lawrence Yun, chief economist for NAR®, forecasts that existing-home sales in 2014 are expected to be 4.9 million, and then increase to 5.3 million in 2015 and 5.4 million in 2016. He expects the national median existing-home price will rise four percent in 2015 and another four percent in 2016. His prediction is based upon more homes on the market, greater consumer confidence and continued pent-up demand.
“The improving job market has consumers feeling more confident, and the rebound in home prices is building household wealth for homeowners and giving them the ability to sell after waiting the last few years,” Yun said.
According to a recent article in REALTOR® magazine, 2015 should present first-time homebuyers with a good opportunity to jump into the housing market after largely staying away since the housing crisis but this prediction may not be true in all areas of the country.
“In 2015, increases in employment opportunities will empower younger buyers to return to the market and fuel the continued housing recovery,” says Jonathan Smoke, chief economist for REALTOR.com®. “If access to credit improves, we could see substantially larger numbers of young buyers in the market.”
The reemergence of first time buyers is one of several forecasts for 2015 made by REALTOR.com®, including:
- Millennials driving household formation. Households headed by Millennials are expected to see significant growth in 2015, particularly if the economy continues to make gains.
- Existing-home sales rising. Distressed properties will make up a smaller share of that growth as investor purchases continue to play a diminishing role in the market.
- Mortgage rates to inch up to five percent. Rates are expected to increase as the Federal Reserve increases its target rate. This could lead to an average 30-year fixed-rate mortgage of five percent by the end of 2015. (It averaged just under four percent in mid-December, according to Freddie Mac.)
REALTOR® magazine said housing affordability may fall slightly in 2015 due to home-price appreciation and rising mortgage interest rates, but any decline in affordability will probably be offset by an increase in salaries next year for many households. “When considering historical norms, housing affordability will continue to remain strong next year,” the magazine notes.
So if you’ve been sitting on the sidelines, 2015 may finally be your chance to jump into the housing market. With rates still near historically low levels and more homes expected to come on the market in the coming year, this may be your opportunity to find the home you’ve been waiting for.