With 2014 being a good year in real state in Florida as the market recovers a lot of our clients are asking what to expect in 2015? Will prices continue to rise? Will interest rates go up? Will inventory loosen up a little? Here are 5 things that the Freddie Mac economists see happening in 2015.
1) Interest rates will rise. With the 30 year foxed rate falling just under 4% in recent weeks it seems the only way to go is up. The prediction is that the average will be somewhere close to 4.6% next year as they creep up towards 5%.
2) Home prices will continue to rise – slowly. By the end of the year home prices will have risen on average 4.5% for 2014, a sharp decline on the 9% in 2013. This trend is expected to continue into 2015 with home prices expected to rise around 3% on average. The good news? Florida may see higher rises as it is expected to be in the top 3 states in the nation. Although “continued house-price appreciation and rising mortgage rates will dampen affordability for home buyers,” according to Freddie economists.
3) New homebuilding to make a comeback. New home builds are expected to rise by a fairly large 20% over this years figures. That will likely help total home sales to climb by about 5 percent, reaching the best sales pace in eight years.
4) Less refinancing. Mortgage originations of single-family homes will likely slip by an additional 8 percent, which can be attributed to a steep drop in refinancing volume. Refinancings are expected to make up only 23 percent of originations in 2015; they had been making up more than half in recent years.
5) Multi-family originations to continue growing though. Mortgage originations for the multi-family sector have surged about 60 percent between 2011 and 2014. Increases are expected to continue in 2015, projected to rise about 14 percent.
SOURCE: Freddie Mac