3 Housing Market Predictions for 2015Posted 01/20/2015
Human beings are naturally curious. Among other things, we wonder about the meaning of life, whether it will rain tomorrow and if our children will get into a good college. And, this time of year, it seems, we are especially interested in what the year ahead will hold for everything from fashion to finances.
National housing market experts also enjoy keeping an eye on the future. While no one can predict with absolute certainty what will happen in the days to come, here are a handful of housing market-trend speculations from three expert sources we trust:
- Single-family housing is poised to take off. A growing economy, rising household formations and pent-up demand will help boost new-home construction this year, according to economists from the National Association of Homebuilders. A NAHB forecast predicts single-family home production will rise 26 percent, to 802,000 units, and reach 1.1 million in 2016. Setting the years between 2000-2003 — when single-family production averaged 1.3 million units annually — as a benchmark for normal housing activity, single-family starts are expected to steadily rise to 90 percent of normal by fourth quarter 2016.
- Consumer optimism will continue. Jed Kolko, chief economist for real estate data firm Trulia, said consumers have had a confident outlook since the recovery started, and their sunny disposition isn’t about to wane now. Nearly three-quarters of respondents in a recent Trulia survey agreed home ownership is part of achieving their personal American Dream – roughly the same results as in a similar survey the year prior and slightly above levels of the three previous years. Fully 36 percent of survey respondents said this year will be a better year to sell than 2014.
- The millennial generation will begin to make its mark on housing. Realtor.com Chief Economist Jonathan Smoke’s housing market predictions for 2015 assert that more than two-thirds of household growth in the next five years is expected to come from this influential generation. Millenials have been slow to form new households for a number of reasons, but 2015 may well be the year when they fly from their parents’ nest and join the ranks of first-time homebuyers.
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