THE REAL ESTATE Insider
2015 FORECAST: GAINS AHEAD
By: Robert Freedman of Realtor Mag
Alone among big Western economies,
the United States is poised for solid
growth in 2015, fueling job creation and
keeping home sales on an upward path.
The National Association of REALTORS®
forecasts that existing-home sales will
reach 5.3 million, an increase of almost
half a million over 2014. The national
median home price will rise, too, but at a
sustainable 4 percent rate, to just below
$216,000.
Increasingly confident renter households
will enter the homebuying market after
watching rental growth rates hit a sevenyear high. And households that were
forced into foreclosure or a short sale
during the housing crisis several years
ago could begin streaming back to the
market, too.
2014
2015
2016
Forecast
GDP growth 2.2% 2.7% 2.9%
Existing-home sales (millions)
4.90
5.30
5.40
New-home sales (units)
440,000
620,000
700,000
Housing starts (units)
1,000,000
1,300,000
1,400,000
Home price (median)
$ 207,600
$ 215,900
$ 225,300
Fed funds rate 0.1% .4% 1.6%
30-year mortgage 4.2% 4.9% 6.0%
Wealth Gap
Household Wealth: Owners vs. Renters
Owners Renters Difference
1998 $132,100
$4,200 31x
2001 $172,600
$4,800 36x
2004 $184,700
$4,000 46x
2007 $234,800
$5,100 46x
2010 $174,500
$5,100 34x
2013 $195,400
$5,400 36x
Sales will be bolstered by the expected
return of more reasonable mortgage
underwriting standards that were in
place prior to the housing boom. This
shift by lenders will help soften the
impact of gradually rising interest rates,
which NAR expects to top out just below
5 percent this year. If interest rates defy
expectations and remain close to where
they are currently, this will be another
boost to housing sales, says NAR Chief
Economist Lawrence Yun.
Steady Gains
(existing-home sales)
2009 3,820,000
2010 4,190,000
2011 4,260,000
2012 4,660,000
2013 5,090,000
2014 4,937,000
2015 5,295,000
2016 5,380,000
On the commercial side, continued
modest improvement in vacancies,
absorption rates, and rent growth is
projected for all the major sectors in
2015.
Want to Buy
Gen Y attitudes on home ownership
Home ownership is an important long-term goal
75%
Home ownership is an excellent investment
73%
Among renters, belief owning a home makes more sense
59%
Among renters, belief it’s difficult to get mortgage
73%
Source: Fannie Mae, 2013 Demand Institute Housing and Community Survey
The big unknown for real estate is
the health of the global economy. If
the economies of Europe and other
powerhouses continue to lag, further U.S.
growth could be stymied, slowing the
expansion of residential and commercial
markets.