Predictions for the 2016 Housing Market
The New Year brings fresh expectations for just about everything and, of course, that includes the housing market. When buying a house location is always important, this is not changing in 2016. For most people, location, cost and nearby amenities will remain the most important criteria when searching for the perfect home.
We also expect to see more first-time home buyers looking at suburbs, preferably ones that are more densely populated and walkable. If this proves true, it will likely increase condominium sales in 2016.
A year or so ago, 2015 was predicted to be the year for Millennials to begin buying homes since they were older and the real estate market was more recovered. But that did not seem to be the case. For 2016, we aren’t expecting much different. Millennials will become a bigger and bigger force in the market going forward, but it is unlikely that we will see a flood of home buying activity from them in 2016. The millennials will trickle in when they see fit. They are taking their time getting into the housing market because they are getting married and having children later in life. They want their home buying decisions to support these prominent milestones in life – and rightly so!
New Year’s predictions for 2016 wouldn’t be complete without a quick look at new housing trends. In 2016, for the first time since 2006, total sales for existing and new homes will reach 6 million; this resulted from a strong gross domestic product increase of 2.5 percent and continued job creation. The new construction market will continue to see more significant gains in 2016 as new home starts increase 12 percent year over year and new home sales grow 16 percent year over year. The improvement we’ve seen over the last few years have allowed a recovery in the existing housing market, but we still need to make up ground in new construction which we hope to see in 2016.
Even though the Fed raised interest rates, the effect on mortgage rates and the housing market is expected to be minimal in 2016. It is going to be a great year and we hope to hear from you! Please contact us here if you have any questions about mortgages or buying a home!
