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 firstname.lastname@example.org. It would be an honor to earn your business!