What are economists saying about the 2015 housing market? Plenty! Chief economists from some of the nation’s most popular real estate websites are enthusiastic about the state of the housing market this year. Why? The experts site an increase in home sales combined with low mortgage rates and gas prices as the main reasons for their optimistic outlook. Overall, the economists had a 65 to 90 percent confidence level in a better housing market this year.
“Home prices are going to rise more slowly this year than last year, but faster than incomes,” said Jonathan Smoke, chief economist for Realtor.com.
“Roughly 42% of Millennials say they want to buy a home in the next one to five years, compared to just 31% of Generation X,” said Stan Humphries, chief economist for Zillow. “The lack of home-buying activity from Millennials thus far is decidedly not because this generation isn’t interested in homeownership, but instead because younger Americans have been delaying getting married and having children: two key drivers in the decision to buy that first home. As this generation matures, they will become a home-buying force to be reckoned with.”
Trulia Chief Economist Jed Kolko noted that “Washington is actually less of a wild card than it has been in years. We’re seeing nibbles around the edges, not comprehensive reforms.”
Other experts agree and also have positive predictions for the coming year:
The Mortgage Bankers’ Association predicts that rates will rise to 5% by the end of 2015; Freddie Mac’s chief economist Frank Nofthaft expects a more cautious average of 4.5% in 2015.
This good news won’t last forever. In fact, members of the United Steelworkers Union at refineries that produce nearly 10 percent of U.S. gasoline, diesel and other fuels, are pushing for a new national contract with oil companies covering laborers at 63 plants. If a new deal isn’t reached, drivers at the pump could take a hard hit.
“You can forget about $2 gasoline,” warned Carl Larry, director of oil and gas at consulting firm Frost & Sullivan. “It’s going to be a big deal. People are going to be freaked out.”
If you are looking to sell or buy a luxury home, estate, vineyard or winery in Napa Valley or Sonoma, now is good time to go for it in light of what economists are saying about the housing market in 2015 combined with the caution of rising gas prices. Please call me at 707-738-4820 or email me at [email protected]. I stay up to date on what’s happening in real estate and personal finance on a global basis. Please be sure to LIKE me on Facebook so you can stay informed too!