In the News Presented by Prairie Title
Commentary by Frank Pellegrini, Prairie Title CEO
July 27, 2015 – Are millenials ready to jump into the real estate market? Some interesting research shows they just might be. According to a realtor.com ® consumer behavior survey of more than 12,000 respondents, millennials are primed to gain market share in the second half of 2015 as more take the plunge into home ownership.
“This year, we’re seeing an increase in millennial demand that points to a strengthening first-time buyer demographic,” said Jonathan Smoke, realtor.com®'s chief economist. “As the economy continues to grow over the next few years, we can expect first-timers to return to a healthy level of 40 percent of the market.”
Last week, DS News published an article noting that the share of first-time purchasers (many of them millenials) was up through the second quarter, noting: “The first-time buyer share in April, May, and June was launched to new highs, supported by improvements in the labor market, riskier mortgage lending, and continuing low mortgage rates.”
That’s two pieces of good news as we move into the second half of 2015. There are many other hopeful signs and I believe the arrow is pointing up. I’m particularly encouraged by the commentary of Lawrence Yun, NAR’s widely respected chief economist. His material is always worth reading.
In a recent column, Yun rejects the idea of an imminent housing bubble. “After running various scenarios, I expect home prices to rise continuously as long as mortgage rates remain under 6 percent….Going forward, keep in mind that robust job creation and meaningful increases in income levels will help propel home prices. For now, though, no bubble or impending crash is in sight.”
Need more encouragement? Take a look at these numbers from NAR’s second half forecast:
· Residential construction spending increased 6 percent in the first quarter. Housing starts are rising and therefore this component will pick up even at a faster pace in the second half.
- Builders will construct more homes. By 1.1 million in 2015 and 1.4 million in 2016.
- All in all, existing and new home sales will be rising. Combined, there will be 5.8 million home sales in 2015, up 7 percent from last year.
Do you agree? Let’s keep the discussion going. Call or email me, or write a post on my blog.
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