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2015 Housing Forecast

Briarcliff.lakeviewThe Home Builder Association of Greater Austin recently presented the 2015 Housing Forecast that showed great news for the next few years! Always glad to hear good news!!

The information was gathered by 360° Real Estate Analytics and John Burns Real Estate Consulting – both of which are known for their expertise in economic analysis and the real estate industry. The information gave an overview of the U.S. economy, Austin’s economy and the many factors that directly relate to the housing industry.

One of the main points that I found interesting was that they pointed out that economic expansions after a significant recession normally last 3-9 years and that 2017 will mark the 8th year of our country’s economic recovery since the Great Recession of 2008. This data was useful when looking at their key assumptions for the housing forecast.

  • Assumption #1 – Mortgage rates on a 30-year fixed rate will remain low through 2018 with a rise to 4% in 2015 and up to 4.7% in 2018.
  • Assumption #2 – The U.S. will continue to have growth in the job market through 2016 with it slowing down in 2017-2018 (Hence, the reason for them pointing out that economies come back in 3-9 year intervals.)

Additionally, Austin had a 17% growth in builder’s active communities – the highest in the major Texas markets. Most of this is due to the rapid growth, 110+ people moving to our area every day and the lack of homes on the market.

Overall, U.S. home sales are expected to grow 6% in 2015 with a rise in mortgage payments of 4-10% each year through 2018. Payment increases will derive from rising mortgage rates and to price appreciation.

The rising payments is not surprising, as on average the national monthly mortgage payment rose 30% from July 2012 to December 2013. Austin was below average with only a 26% increase.

Unfortunately, first-time-home buyers account for only 31% of resale sales compared to a historical average of 40%. This could be due to high costs, people marrying later and many other factors.

However, as a whole, the future looks bright for the next few years with strong job growth and a healthy real estate industry – which means an overall advantageous economy for us all!

If you or someone you know would like to purchase real estate while the interest rates are still low or sell real estate while the Austin market is still great, please do not hesitate to contact Mary Lynne Gibbs at 512.431.2403 or austinluxurybroker@gmail.com. It would be an honor to earn your business!

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2015 Housing Predictions

930A5923_4_5_fused (1)As the year draws to an end, 2015 housing predictions are already being calculated. Seems like we just started 2014 and here we are closing it up!!

Nonetheless, Realtor.com’s Top 5 Predictions are not all that shocking, but they are definitely good to know if you will be looking to buy or sell real estate in the upcoming year.

The entire article can be found at 2015 Housing Predictions if you would like to peruse what economic experts have to say in detail about the following list. But, for the shorter version…look no further.

The 2015 housing industry expected trends include:

1.     Mortgage Rates Will Head Back Up

2.     Millennials (ages 25-34) Will Set up House

3.     Builders Will Break New Ground

4.     Credit Will Continue to Be a Major Factor

5.     We’ll Close Out the Foreclosure Crisis

Basically, mortgage rates can’t stay low forever, but good credit will be the determining factor of whether banks will loan someone money because of continued stringent mortgage qualifications.

This just means that if you are thinking about buying a home in the near future, you must tighten up your spending, pay bills on time and straighten up any credit issues you currently have.

Moreover, with more millennials buying homes, builders will have to add inventory to keep up with the housing demands. The home building industry will be interesting to watch in 2015, as their greatest issues include shortages in labor and materials.

The best news is that the U.S. economy continues to strengthen and that helps people find jobs to pay their mortgages and in effect puts a halt to the foreclosure crisis we have seen in the past several years.

Obviously, every market is different and if you would like to know more about the Austin area real estate market, please contact Mary Lynne Gibbs at 512.431.2403 or austinluxurybroker@gmail.com. It would be an honor to earn your business!