With less than three months in the year, the sun is setting on a successful 2015 in the residential real estate department, as home prices have appreciated, mortgage rates are affordable and heightened demand is keeping prospective homeowners on their toes, biding their time before getting off the sidelines to take advantage of a steal of a deal.
Based on a newly released projection, it could be more of the same in 2016.
Prices increases to move at slower pace
Fresh off of a stellar year for housing, the sector is projected to perform admirably in 2016 as well, according to a newly released estimate from the Home Buying Institute. For example, home prices are not only expected to increase, but rise more modestly, particularly in major metropolitan areas. Generally speaking, increasing home prices is a sign that the residential real estate market is healthy. However, when asking values appreciate significantly, it can put homeownership out of reach for families who are operating on a fixed income or tight budget.
"The general consensus among housing analysts is that home prices in the U.S. will continue rising in 2016, at least in most U.S. cities," the report stated. "But the gains might not be as steep as what we have seen this year."
Year-over-year home prices gains have been observed for well over 40 months in a row, according to data from residential property analytics firm CoreLogic.
Another encouraging forecast is the expectation that mortgage rates will remain affordable for the foreseeable future. The Home Buying Institute reported that in September 2015, the Federal Reserve forecast a potential hike in short-term interest rates, only to decide to keep them where they are because the economy's function didn't justify an uptick. Interest could rise gradually in 2016, but even if they do, it "could be offset by continued improvements in the job market and broader economy."
Economy to continue flourishing through added jobs
What's also boding in the residential housing sector's favor is job availability, the Home Buying Institute noted. The private sector has seen more than 65 months in a row of uninterrupted employment growth. This means that more people have the financial wherewithal to apply for a mortgage, because proof of employment is one of the requirements needed to be approved for a home loan. Continued job gains are expected to bring more home buyers into the market.
To receive a free quote, simply visit www.capwestmortgage.com/quote or call (866) 614-5959 to speak with a CapWest Mortgage representative today.