Here are a few things we can expect for the year to come:
First time Homebuyers will return to the market next year and they are millenials:The residual financial effects of recession-driven job losses and subsequent unemployment have impeded millennials’ entry into the home-owning market. In 2016, increases in employment opportunities will empower younger buyers to return to the market and fuel the continued housing recovery.
Both population and households will continue to grow at a slightly higher pace. Households headed by millenials will see significant growth as a reflection of economic gains. Millennials will also drive two-thirds of household formations over the next five years. Next year’s addition of millions of jobs and increased household formation will be the two key factors driving first-time buyer sales.
The Millenials are said to be about 90 million of the population, it is the largest generation we have ever seen in the USA. They make up about 29% of the population and 17% of households. They are the dominant percentage of active home shoppers and are more interested in urban areas.
Existing Home Sales will increase: Existing sales will grow as more people are purchasing properties driven by the belief that rates will only keep on increasing. While the majority of housing activity next year will be driven by baby boomers preparing for retirement, millennials will account for the highest percent of first-time home buyer sales in 2016.
Home Prices will go up: While the demand will be driven up by improved employment opportunities, the fact that there is a low inventory will cause an increase in the market prices.
Mortgage rates are most likely to increase: Mortgage rates will increase by mid year if not earlier as the Federal Reserve increases its target rate. Thirty year fixed rate mortgages will incline. One year adjustable rate mortgages (ARMs) will rise as well.