Experts of economy and U.S. housing property markets chime in on what buyers, investors, and sellers can hope to expect for 2016.
Based on a report by Inman, 2015 was a good year for home sales and prices of housing properties are still going up which has made economists optimistic about forecasting for 2016. There are many aspects to consider such as home prices, housing sales, increasing interest rates and the slackening of lending rules championed by different agencies of the government. However, due to the fact that this is an election year, they are wary about the changes adopted by Freddie Mac and Fannie Mae.
Economists like Clear Capital's Alex Villacorta see two crucial trends in the housing market for 2016 -- rental rates and home prices. According to Villacorta, rental rates will continue to grow this year which is an offshoot of the great performance of the rental market in 2015. If this trend does not change anytime soon, more people will likely prefer renting over buying their own homes.
Realtor.com's Jonathan Smoke, on the other hand, says that for-sale housing popularity will remain strong especially among millennials who belong to the 25-34 age range. Smoke believes that they can actually own about a third of total home sales in 2016 which translates to about 2 million homes being sold.
Meanwhile, according to Alabama News Center, homeowners are finally getting back equity they lost during the Great Recession which makes ownership a tough sell to millennials. However, studies have shown that despite the fact that many people below the age of 35 still prefer to rent, buying their own homes is still seen as the best deal for millennials who are scared to commit long term especially on an expensive purchase such as homes. One reason for this thinking is the lack of knowledge about lending requirements. Most of them believe they will not be given mortgage loans even though they have all the means to qualify.