Realtor Magazine ® | This year may have marked the best for housing since 2007, but the market will likely get even rosier, according to a recent real estate forecast by realtor.com®. Realtor.com® highlights the following housing predictions for 2016:
1. ‘Normal’ is coming.
Expect a healthy growth in home sales and prices – at a slower pace than in 2015. “This slowdown is not an indication of a problem-it’s just a return to normalcy,” writes Jonathan Smoke, realtor.com®’s chief economist
2. New-home construction focuses more on affordability.
In 2016, builders will likely shift to more affordable housing to cater to the entry-level buyers. In addition, credit access is improving enough to make the first-time buyer segment more attractive to builders.
3. Higher mortgage rates.
Mortgage rates will likely be volatile in 2016. But the recent move by the Federal Reserve to guide interest rates higher should push mortgage rates higher in the new year than the historical lows they have been at for years – although so far, there has been very little change.
4. Rents to go up even higher.
Rental costs are skyrocketing, and the costs are likely to only go up in the new year. More than 85 percent of the nation’s markets have rents that exceed 30 percent of the income of renting households.