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USA Property Market Predictions 2016


USA Property Market Predictions 2016

 2015 was a surprisingly good year for the US housing market, and we expect to see more of the same in 2016. If you have USA house for sale, the news is generally positive. Here are our predictions for the USA housing market 2016, and we begin with the bad news.

Prediction #1: Real estate prices won’t rise as much in 2016 as they did in 2015.

So, we start off our predictions on a slightly negative note – but that is only if you are looking to sell properties in the US. Home prices won’t rise as much in 2016 as they did in 2014 and 2015, and that’s because of the supply/demand imbalance which was so high the last couple of years, has been largely solved. There are more than enough homes for sale available in the housing market to meet the rising demand. So, this is actually great news for first time buyers who have actually held back the purchase hoping for prices to fall. Well, they will get their chance in 2016.

Prediction #2: Millennials still won’t be a part of the housing market

It is an unfortunate fact that most Millennials or people in their twenties and early thirties don’t have houses of their own and don’t plan to buy one either. Rising student loans are a huge problem with this section of the population. Indeed, outstanding student loans are worth over $1 trillion in the United States, which is quite incredible.  There’s also a plenty of credit card debt to deal with. So, most Millennials have poor credit ratings and a huge debt burden. Unfortunately, this makes them ineligible for housing loans. So we don’t expect the Millennials to be buying a lot of houses in 2016.

Prediction #3: Mortgage rates to rise in further in 2016

Mortgage rates have been at a historic low in the United States for much of 2015, buy have risen slightly over the last couple of months. The rise is expected to continue in 2016. It won’t be steep – it is likely to be between 4% and 5%. Freddie Mac said in a report, “Based on the Fed’s decision last week to defer an increase in the Federal funds rate, we lowered our 2015 and 2016 interest rate forecasts by 0.1 percent for both the 10-year constant maturity Treasury (CMT) and the 30-year fixed rate mortgage (FRM).”

So this is generally positive news for buyers and we expect the buying activity to be a lot higher in 2016 because of this.

Prediction #4: Better Jobs Data means more people will enter the housing market.

The jobs data for both 2014 and 2015 has been quite impressive – over 5 million jobs were added to the economy between 2014 and 2015. So clearly, these are signs of a healthy economy and the fact the recession is well and truly over. Things look good yet again, and there is optimism in the air. This means there will be a much higher activity in the housing market and the demand for houses is expected to be quite high.

Prediction #5: The West will witness the highest gains in property prices.

The western half of the country saw the highest gains in property prices in 2015, and we expect this trend to continue into 2016. In California, property prices rose by over 10% last year. It was the same in Denver, Colorado. While the rise won’t be as much in 2016, it will certainly be higher than the national average. In fact, the three cities in the United States that have witnessed the highest rise in prices since 2000 are all in California – Los Angeles, San Francisco and San Diego. 




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