As the economy starts to bounce back from the latest recession and employment increasing, people are now looking to put down permanent roots. Many sources have claimed that 2015 was the best year for the housing industry since 2007. But what kind of trends are on track for 2016? Let’s take a closer look at the upcoming housing market.
The year ahead will be full of healthy growth in home sales and prices. While this change will be slower than last year, it will be a step in the right direction. This slowdown doesn’t indicate a problem; it is just a return to normalcy. After working through the devastating effects of the housing bust, the economy is finally seeing signs of the normal conditions ahead. As we head back into normal territory, distress sales won’t be quite so common and new construction will return to traditional levels. The housing prices will also return to a more normal rate which means a balanced market will be achieved.
Builders Shifting Focus
One aspect of housing that has not recovered yet has been single-family home construction. In 2015, many of the new homes that were constructed came with a higher price tag. Builders faced higher land costs, limited labor, and limited demand for new homes. But in 2016, new construction prices will decline and credit access will improve enough to make first-time buyers more attractive to builders.
Higher Mortgage Rates
The mortgage market has seen a lot of ups and downs throughout 2015 and the trend is likely to continue into 2016. Thirty-year fixed mortgage rates are likely to end the year about 60 basis points higher than the current rates. While it is a manageable increase, it will mean higher monthly payments and higher debt-to-income ratios. Markets with the highest prices will see the higher rates mean fewer sales.
This could mean turmoil in the market for many people but these trends will also help a buyer find their dream home sooner without having to fight with other buyers over the property. Because the mortgage rates are due to increase at the end of the year, it is a safe bet to buy your dream home today. Let us help you get started, call Simply Referable today!
Real Estate Trends with Simply Referable
The small team of realtors at Simply Referable is deeply focused on creating a memorable selling experience for you and your family. Each of our team members has an area of expertise, and we strive to form lasting bonds with each of our clients. We want to be your go-to realtors every time you or a friend wants to make a change. With local experience, our realtors can help you choose a house that is just the right fit for your family, now and forever. Contact us online or give us a call at 410-983-9045.