US market to rise further in 2016, but slower than in 2015
The American resale property market will continue on its upward trend in terms of value and volume in 2016 but at a slower pace than 2015, said the US trade body for real estate, the National Association of Realtors (NAR) in January, which added 2015 was the market’s best year in nearly a decade.
Affordability pressures and meagre economic growth are the key things causing this, said NAR Chief Economist Lawrence Yun in a statement broadcast this month.
Despite his forecasted increase in sales, Yun cites rising mortgage rates, home prices still outpacing wages and shaky global economic conditions as headwinds that will likely hold back a stronger pace of sales.
"This year the housing market may only squeak out 1 to 3 per cent growth in sales because of slower economic expansion and rising mortgage rates," states Yun. "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."
With one month of data remaining for 2015, Yun expects total existing-homes sales to finish the year up 6.5 per cent from 2014 at a pace of around 5.26 million - the highest since 2006, but roughly 25 per cent below the prior peak set in 2005 (7.08 million). The national median existing home price for all of 2015 will be close to $221,200, up around 6 per cent from 2014.
In 2016, existing sales are expected to grow between 1 and 2 per cent (5.30 to 5.40 million) and prices between 5 and 6 per cent.