2015 looks to be a promising year for home sales and for the U.S. economy in general, according to predictions by Freddie Mac.
Last month, Freddie Mac released their U.S. Economic & Housing Market Outlook, in which their Chief Economist Frank E. Nothaft reviewed the activity of 2014 and made predictions for 2015. (You can read the full report here.)
Continued economic growth
Though the U.S. economy faced some setbacks early on in 2014, the economy grew 4% during the second half. This upward trend bodes well for the new year. “We believe [the U.S. economy] is well poised to expand close to a 3 percent in 2015,” the report states.
“This pace should generate more jobs than over the past year, and we project that household incomes will rise.”
Housing market improvements
The growth of the economy at large will have a positive effect on the housing market. The Freddie Mac report projects a 4% growth in home sales in 2015, “which would mark the highest level of annual sales since 2007.”
Freddie Mac predicts home sales will reach 5.6 million in 2015, which is consistent with predictions made by the National Association of Realtors and the Mortgage Bankers Association. (See chart, right)
Potential rise in mortgage rates
There is a bit of a catch for prospective home buyers, however. The Federal Reserve has kept mortgage rates historically low in recent years (hovering around 4%, though sometimes as low as 3.6% for a 30-year fixed mortgage).
Now that the housing market is picking up, keeping the rates low is no longer a priority. “An extended period of extraordinarily low mortgage rates remains a temporary gift from the Federal Reserve, and we expect rates to increase gradually in the coming year,” the report states.
So we can expect to see a modest rise in mortgage rates: “The Federal Reserve will likely allow long-term rates to drift higher, especially in the second half of the year, but with fixed-rate mortgages remaining below 5 percent.”
Is 2015 your year?
Overall, 2015 looks to be a promising year for buying or selling your home, especially before mortgage rates rise.
Thinking about making your move? Contact someone at The Haro Group. We’ll be glad to give you the information you need to make your decision, and we’ll walk with you through every step of the process.
Here’s to a great 2015!