In the 2016 housing market expectation report released by the National Association of Realtors (NAR), the sales of existing homes are expected to expand in a more moderate pace as restrained buyers continue to dance with affordability issues and the meager growth of the economy.
"This year the housing market may only squeak out one to three percent growth in sales because of slower economic expansion and rising mortgage rates," said Lawrence Yun, Chief Economist of the National Association of Realtors, in a video of his 2016 housing market expectation. "Furthermore, the continued rise in home prices will occur due to the fact that we will again encounter housing shortages in many markets because of the cumulative effect of homebuilders under producing for multiple years. Once the spring buying season begins, we'll begin to feel that again."
According to the press release of NAR in PR NewsWire, Yun predicts total existing-homes sales to conclude the year up 6.5 percent from 2014, at a pace of around 5.26 million -- the highest since 2006, but roughly 25 percent below the preceding peak set in 2005 (7.08 million). The national median existing-homes price for all of 2015 will be near to $221,200, up around six percent from 2014, while the sales of existing-homes are expected to grow between one and two percent (5.30 to 5.40 million) and prices between five and six percent in 2016.
Despite Yun's prediction of an increase in home sales, he noted that increasing home prices and rising mortgage rates, in addition to the tight inventory and slow economic growth of the U.S. and world economy, will all serve as a speed bump further along the road.
The National Association of REALTORS® is America's largest trade association, composed of residential and commercial REALTORS® who are brokers, salespeople, property managers, appraisers, counselors, and others engaged in the real estate industry. NAR represents 1.1 million members, including NAR's institutes, societies, and councils, involved in all aspects of the residential and commercial real estate industries.
