The U.S. has weathered The Great Recession and emerged victoriously. Americans are resilient and now it's paying off in a big way. Although the 2007-2010 housing market is characterized by deflated home values, an era of short sales and bank foreclosures, and negative equity, those who remained in their homes are now reaping the benefits of staying the course.
This month Realtor.com reported that total home sales next year are anticipated to reach the highest numbers since 2006. Sales of existing and new homes are also expected to reach 6 million for the first time since 2006. The pace of growth of existing home sales and prices is presumed to hold steady but remain strong overall. New home sales are foreseen to increase by 16 percent.
In September, CoreLogic released a U.S. home equity report, showing that 91 percent of all mortgaged properties now have positive equity. The negative equity pandemic has passed and now home prices are rising year after year. CoreLogic predicts home prices will continue to rise an additional 4.7 percent through 2016. Sellers are in a better equity position and buyers are feeling more urgency to secure their place in residential property wealth acquisition.
The Urban Land Institute Center for Capital Markets and Real Estate reported that not only is the residential market holding strong, but so is the industrial/warehouse, office, retail, and rental market. Analysts expect rental rates in all of these sectors to rise 2 to 4 percent through 2017.
The Washington Post recently reported that the Fed may increase interest rates, but it likely won’t affect the market substantially. The Mortgage Bankers Association predicts a 30-year fixed-rate mortgage will hover around 4.8 percent at the end of 2016, an increase of less than one percent. These numbers are encouraging for a nation coming out of the incorrect belief that the housing market will continue to be a bumpy ride. The data proves otherwise.
Millennials have been on the fence regarding home ownership, but this past year homebuyers ages 24 to 35 account for 30 percent of existing homes sales. This is exciting news for real estate practitioners as it indicates the market is trending back to normal for buyers in this age group (typically this age group accounts for 37 percent of all home sales). Within the Ada County market, it certainly helps that the Treasure Valley has recently been named the #1 place to live (Meridian) and the #2 place for Millennial Entrepreneurs to live and start a business (Boise).
If you’ve been thinking about making a move, 2016 will be a great time to do so. The Mike Brown Group can help you find the perfect home or help you determine how much your current home is worth. We're looking forward to 2016 and all the exciting predictions for the U.S. economy and especially the U.S. housing market.