As 2015 is coming to its end, several predictions in the real estate industry have been surfacing. One of those is Core Logic's predictions on what will happen in the industry for the new year.
According to dsnews.com, Core Logic chief economist and senior vice-president Dr. Frank Nothaft release his "2016 Outlook for Housing."
In his new report, Nothaft predicts that "As we approach the start of 2016, the consensus view among economists is that economic growth will continue, and the U.S. will enter an eighth consecutive year of expansion in the second half of next year. Most forecasts place growth at 2 and 3 percent during 2016, creating enough jobs to exert downward pressure on the national unemployment rate."
One of his predictions state that mortgage originations from single- family will drop with 10 percent despite of raise in home purchase loan origination and home equity lending. He also predicted that due to increase in mortgage rates, home refinancing will decline as home owners will be scared to "refinance their existing mortgages."
Also, as rental vacancy percentage is now close to its lowest rate in 20 years, multifamily originations will experience an increase. Demand for houses and apartments is also expected to shoot up as new set of younger households take the step of having their own place.
In a report by housingwire.com, Nothaft's report predicts that there will be an increase in home prices and home sales. Core Logic's Home Price Index indicated a six percent increase in the past year and 2016 is expected to have a four to five percent increase in sales. The increase is most likely to be a result of improved economy where people's perception of financial stability is heightened.
Lastly, Nothaft's report predicts that interest rates for home equity loans or adjustable- rate mortgages are more likely to increase with one percentage point due to Federal Reserve's possible increase short- term interest rates. Also, fixed- rate mortgages will also increase with one- half of percentage point resulting to 4.5 percent in 30- year loans.
What are your thoughts about core Logic's predictions? Do you have your own real estate predictions for 2016? Share it in the comments!