In the News Presented by Prairie Title
Commentary by Frank Pellegrini, Prairie Title CEO
February 17, 2015 – What’s a forecast worth? As that question relates to the many positive expert forecasts we’ve read regarding the 2015 real estate market, we hope the answer is: A Lot.
NAR predicts a 7.4 percent increase in existing home sales, a rise in median home prices and a whopping 37 percent increase in new home sales. One factor that undoubtedly plays a role in the NAR forecast is their expectation that rents will rise 4 percent this year. Simply put, when rent costs go up, potential home buyers who have been sitting on the fence may be tempted to invest in owning a home rather than continuing to rent.
Laurence Yun, NAR Chief Economist, explains their view further in his forecast for 2015: “Home prices have risen for the past three years cumulatively about 25 percent, which boosts confidence in the market and traditionally gives current homeowners the ability to use their equity buildup as a down payment toward their next home purchase.
Furthermore, first-time buyers are expected to slowly return as the economy improves and new mortgage products are made available in the marketplace with low down payments and private mortgage insurance.”
And NAR is not alone in predicting improvement in 2015. The National Association of Homebuilders corroborates NAR’s forecast with their twin predictions that new home starts will increase 26 percent and sales of new single family homes will rise nearly 30 percent.
All of this dovetails with predictions that millennials are poised to jump into the market, a subject we’ve discussed before. One interesting sidelight to this development, especially for real estate brokers and mortgage lenders, is the growing importance of attracting and catering to the younger demographic through technology. And all this in the year in which lenders, in particular, need to gear up for the implementation of the new Integrated Mortgage Disclosure rule on August 1. (Read more here about the changing role of lenders). Successful loan originators will rise to the challenges of the new market.
Let’s keep the conversation going. Call me at 708-386-7900, or email: firstname.lastname@example.org.
Other stories we’re following:
Moody’s Predicts 45,000 New Home Buyers from Rate Cut
“Normal” House Price Growth?
FDIC Video re: Mortgage Disclosure Rule.
Fannie: Homebuyers and Lenders Excited about 2015