Housing market predictions for 2015

As the New Year is welcomed in, so are positive predictions for the nation’s housing market. After years of slow and steady recovery, in 2014 the U.S economy saw its best year since the 2008 recession. With the economy continuing to show improvement and income levels seeing growth, housing experts and economists have high hopes for 2015.

Here are a few trends and predictions that Orlando Realtors expect to see play out in the coming year:

• Lending standards will be loosened. In December 2014, Fannie Mae and Freddie Mac announced they would be offering 3 percent down payment mortgages, rather than 5 percent. “Many potential buyers simply do not have the resources to save for a substantial down payment,” said ORRA President Sharon Voss, Watson Realty Corp. “This new program will allow first-time, credit-worthy buyers who would otherwise be kept out of the market to purchase a home.”

• Mortgage rates will go up. With the economy improving, the Federal Reserve has indicated that it will be increasing the federal funds rate in 2015. This rate has a substantial impact on mortgage rates, which have been at historic lows for the past few years. “The impact is that if you are considering buying a home or refinancing your mortgage, now is the time,” said Voss. “The rates will likely increase as the year progresses.”

• Millennials will enter the market. As the economy continues to make gains and the job market improves, millennials (ages 25-34) will start forming households and entering the housing market. “Millennials began to enter the market in 2014, but as the job market continues to improve and rent prices continue to rise millennial’s involvement in the housing market will likely increase,” said Voss. “Combine that with opportunities for lower down payments, and it’s a prime time for young people to enter the market.”

• Housing inventory will increase. Builders will begin to ramp up production in 2015. This increase in inventory should help improve choices for consumers, another potential draw for first-time buyers.

Of course all real estate is local, and the Orlando market is expected to remain strong in 2015. “With decreasing interest rates, excellent affordability factors, and a blossoming inventory, our market is expected to see healthy levels of growth in both sales and median price,” said Voss. “And as our traditional first-time buyers are finally getting a break from competition by all-cash investor buyers, the move-up will gain additional momentum as well.”

For more information about the 2015 housing market visit orlandorealtors.org or contact a Realtor, whose expertise and local market insights can help make your homeownership dream come true in the year ahead.

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