As we end 2014 and begin a new year, it seems like a good time for real estate predictions. Home prices have been rising lately, but will they continue? Here are some expert predictions for the real estate market in 2015.
Easier for Home Buyers
Homes have recently become a great idea for real estate investors because prices have been rising so quickly lately. October showed some of the highest home prices since 2008. While home prices will continue to rise, the rate at which they grow will probably slow down. This will lead to less real estate investors showing interest and make room for more home buyers. Instead of a 6% growth, we are more likely to see a 3% growth, which could mean a buyers’ market next year.
Millennials Become Home Buyers
Recent financial hardship has led few millennials to purchase homes. Instead, they have remained in rentals and stayed away from permanent real estate. Experts agree this trend could be changing. Because the economy is doing better and home ownership will become easier, they think millennials could become the largest group of home buyers next year. We could see a migration of the millennial from the rental to home ownership.
Easier to Qualify For a Loan
Since the economy is improving and home sales are up, banks and mortgage lenders such as Freddy Mac and Fannie Mae, will start loosening bank regulations. This means that homeowners might be able to qualify for home loans with only a 3% down payment, and perfect credit won’t be a prerequisite. Buyers may have a better chance of qualifying for a home loan and buying their own home.
Higher Interest Rates
Due to the loosening bank regulations, more people will qualify for a loan, but they may receive a higher interest rate. Interest rates have remained at historic lows over the last few years to encourage people to buy real estate. An improved economy points to interest rates rising, at least slightly. While home buyers should get excited at the prospect of qualifying for a loan, they shouldn’t expect to receive the same interest rates that people have been offered over the last few years.
Construction Will Increase
Only a little more than 1 million homes were constructed in 2014. Experts predict construction will pick up in 2015 with a 16% growth in new home construction. St. George especially grew during the housing bubble in 2006 and 2007. We could experience more home construction and growth in the area.
While nothing in real estate is for certain, these are some of the prediction based on recent economic trends. Now is a great time to build and buy real estate in St. George.