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My Hard Money Lenders Predicts Real Estate Housing Trends for 2015

Experts predict many housing trends to continue for the remaining of 2015, which will help fuel hard money lenders and direct lenders.

• Millennials will continue to help increase home prices. For a number of years, Baby Boomers were dominating the housing market, but recently, one of the largest segments of homebuyers is 22- and 24-year-olds. This younger generation’s presence has been especially marked in areas such as the South and Midwest.
• Millennials will demand housing where it is difficult to build. Single-family construction has been expensive and more Millennials prefer to live in large metropolitan areas, such as Austin, New York and Honolulu, where it is very difficult and least affordable to build or live.
• Mortgages are anticipated to continually increase. With European unrest, mortgages are currently less than they were at this time last year. However, economists are still predicting that by the end of this year, 30-year mortgages will hover around 5% due to a lack of stimulus from the Federal Reserve.
• Home affordability will decline, but prices will decelerate. Economists predict that the housing rebound from the burst bubble several years ago will run out of steam this year. This will cause more homeowners to consider selling their houses next year, which will eventually lead to more pressure on houses. Combine this with mortgage prices increasing and popular markets will simply be unaffordable for the middle class.
• Many homeowners are still upside down in their loans. In March 2015, nearly 13.2% of homes with a mortgage were still underwater, which means they owed more on their mortgage than their house was worth by at least 25%. This is still greatly due in part to people that purchased homes at the peak of the market in 2005 through early 2007.
• Bidding wars are making a comeback. Statistics show that nearly one-third of homes on the market are selling in less than two weeks. This is giving current buyers less time to house shop or make a decision. This is the second-fastest sales time since May 2011. Approximately 46% of homes sold in April were on the market for less than a month.
• Prices are anticipated to increase approximately 5.5% through December. Experts are anticipating gains ranging from 3- to 8% through December. Combine this with higher mortgage rates, which are anticipated to rest around 5% by the end of the year and the housing market could experience a drag.

In 2005, the homeownership rate was 69.1-percent, while today it is 63.7-percent, an all time low since 1993. Only time will actually tell what the real estate market holds, but the third quarter of 2015 will be a one that experts will keep a close eye on.


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