We are about to ring in a New Year and I am happy to report, the outlook on the housing market in 2015 is definitely bright. After all, 2014 was the best year in the U.S. economic recovery since the recession of 2008-2009. Here are some predictions from leading economists:
“The good news for 2015 is that the U.S. economy appears well-poised to sustain about a 3 percent growth rate in 2015 — only the second year in the past decade with growth at that pace or better,” says Frank Nothaft, Freddie Mac’s chief economist. “Governmental fiscal drag has turned into fiscal stimulus; lower energy costs support consumer spending and business investment; further easing of credit conditions for business and real estate lending support commerce and development; and consumers are more upbeat and businesses are more confident, all of which portend faster economic growth in 2015. And with that, the economy will produce more and better-paying jobs, providing the financial wherewithal to support household formations and housing activity.”
- Mortgage rates:Interest rates will likely be on the rise next year to average 4.6% and inch up to 5% by the end of the year.
- Home prices:We’re experiencing a slowing of home appreciation right now to 4.5% this year from 9.3% last year. That appreciation is expected to drop further to an average 3% in the coming year.
- Housing starts:Homebuilding is expected to ramp up in 2015, rising by 20% from this year. That means total home sales will reach the best sales pace in eight years, climbing by about 5%.
- Single-family originations:We’ll see a slip of an additional 8% on mortgage originations of single-family homes, expected to make up only 23% of originations in the coming year.
- Multi-family mortgage originations:Mortgage originations for the multi-family sector have surged about 60% between 2011 and 2014. Increases in Mortgage originations are expected to continue in 2015, projected to rise about 14%. In the multi-family sector, mortgage originations have surged by 60% between 2011 and 2014.
If you are predicting a purchase of a luxury home, estate, vineyard or winery in Napa Valley or any of the surrounding communities in 2015, please call me at 707-738-4820 or email me at [email protected]. I keep up on all the trends in the real estate world, including predictions from leading economists and will happily share all my knowledge with you, where you are buying or selling your property. Don’t forget to LIKE me on Facebook!