Now that we are in the start of New Year, sellers and buyers want to know what may be in store for the year to come. 2015 saw some great stride in improvements with many housing markets improving across the nation in both the number of sales and home values. I have listed a short summary of these trends for you to keep in mind, especially if you plan to sell or buy a home in the coming year.
Home prices and interest rates will be on the rise, but only at a consistence pace. home values countrywide will rise on average 3.5%. The California Association of Realtors expects to see home values across the state rise 3.2%. Economists are saying that interest rates will rise in answer to expected increases from the Federal Reserve.
The good news is rates on 30 year mortgages are expected to see a small raised, going from 4.0% to 4.5% in 2016. In terms of accessible home sales, CAR anticipates an increase of 6.3% in the number of sales for the state overall.
Now the median age of a first time home buyer is the highest it has ever been, age 33. This is a reflection of the housing crisis we went through and the resultant economic changes that have affected many young adults since then. With high rents and wages remaining stationary for many, saving for a down payment has been challenging. This trend is expected to continue for many in 2016. But there may be a bit of good news to help home buyers.
Credit scoring and its effects on home loan experience could become more flexible over the next year. As refinancing is expected to slow down, banks may become more flexible toward credit scores for new mortgages in an effort to "win" more borrowers.
When it comes to home trends, experts forecast that suburbs will make a return in popularity. The Urban Village idea has taken hold in more and more major metro areas across the country, as witness by the continual move of employers out of city centers. The most attractive suburbs have walked able main streets, work opportunities and public transportation.
In addition to these features, more buyers will be looking for Eco-friendly homes with smart features built in. The savings that can be achieved with power smart homes is well attractive. This in turn will make new homes more in demand, as new construction is increasingly including these types of features in homes, making them ready built for those who are environmentally conscious.
Less expensive areas which are experiencing more job increase will see better sales results in 2016, San Bernardine, the Central Valley and Solano County being some examples. In areas such as San Francisco Bay, home sales will rise but at a slower pace due to the smaller list and higher list prices.
California as a state is widely diverse when it comes to housing markets, but our growing economy and the national trends expected for the coming year will help see growth in home sales overall.