Single-family home sales are poised to take off in 2015, according to a recent report by the National Association of Home Builders. Economic growth, low mortgage rates, increased formation of households, and pent up demand are all cited as factors that will drive sales of single family homes in the new year. The remainder of 2014 is also expected to see strong sales in the single-family home sector, paving the way for a booming 2015.
Many buyers have held off on home purchases due to job insecurity, but a steady economy and strong job market are putting their minds at ease and leading these reticent buyers to stop delaying their home purchases. Single-family production is expected to rise 2.5% this year, to a total of 637,000 units, turning into a 26% increase in 2015. Production is expected to reach over one million units in 2016! Multifamily housing is also expected to grow 15% in 2014 and hold steady into the new year.
Not surprisingly, states with significant energy production are at the forefront of the housing market recovery. Texas has seen more improvement in the housing sector than almost anywhere else in the country.
Strong job growth boosts the housing market, and supply of available homes is lower than average. Combined with interest rates around 4%, these factors mean that there has never been a better time to buy. Interest rates are expected to rise to 7% by the end of 2017, so buyers who lock in a fixed-rate mortgage now are looking at savings of thousands of dollars over the term of a 30-year mortgage, compared to putting off their home purchases for a few years.
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