A brand new year brings brand new opportunities, especially if you’re a consumer looking to buy or sell a home in 2016. So what exactly do we have in store for the housing market during the next 12 months?
Industry leaders forecast a variety of promising signs and signs and symptoms, such as slight increases in wages for American workers, the advent of more families, and a housing market littered with incentives for the national housing picture in 2016.
However, it is also worth mentioning that these gains haven’t seemed to have an impact on the US economy like they’ve had in previous years, and we’ll likely see more and more local housing markets stabilize with new home sales in the near future.
After a relentless barrage of disheartening foreclosures and short sales flooded U.S. cities in the course of the recession, some housing markets have recovered in a big way as of late, residential home investors and financial analysts alike.
In 2013, there was a widespread increase in take-home pay across the nation, according to Sales Manager Christopher Edwards of Peoples Bank & Trust. In 2014, those gains were nearly erased in its entirety, so the figures for 2015 that aren't yet available will be a nail biter for macroeconomists.
Click here to use our VA mortgage calculator to see how much you can afford!
However, Edwards predicted that gift funds for home purchases will increase by 53 million this year, which is roughly 6% better than 2015.
Edwards predicts this will be a leading factor for an upward trend in the housing market for 2016, which is a welcomed net-positive in the stability of a recovering housing market.
A few key predictions may dim the positive outlook in 2016, however.
Interest Rate hikes will pressure first-time homebuyers the most
The Fed’s recent pivot to hike interest rates last December represents strong gains in the US economy after the Fed used their benchmark rate tool of 0% to help propel the economy out of a tough recession, but this will mean first time homebuyers will pay more than they otherwise would if the Fed would have held rates at zero.
This increase in rates, together with growing closing costs and limited supply, will make it tougher for first timers to buy a home. Here is the kicker, though: long term fixed rate loans will see a slight increase—at best—during the twelve months, and will stay relatively low in comparison with what fixed rates were prior to the great recession.
30 year fixed rate mortgages, which averaged below 4% for the majority of 2015, will increase to a new average of 4.4% in 2016, according to Freddie Mac. Another big player in the housing market, CoreLogic, predicted that long term fixed rates will increase by roughly half a percent higher in 2016 over 2015.
If you’re a first-time homebuyer weathering the effects of decreased wages and haven’t had a raise as of late, the rate hike could make the prospects of owning a home more difficult. Despite this, the slight rate hikes projected in 2016 isn’t cause for panic and certainly won’t sideline higher-earning homebuyers, says Dwight Hudson, who is one of the highest producing Federal Mortgage Loan Originators at Peoples Bank & Trust.
Click here to use our VA mortgage calculator to see how much you can afford!
Rate hikes will certainly slow down refinancing activity as fewer house owners will begin to see little incentive to refinance their current mortgages, according to Hudson. As a result, the top-producing MLO is forecasting refinance originations to decrease for lenders who are slow to adapt.
The Return of Home Equity and Cash-Out Refinances
After years of home equity disappearing into thin air, many owners are beginning to regain much of the equity they lost during the economic recession, so many homeowners will seek to pull cash out of their homes in an attempt to hedge against further house-price risk, according to Hudson.
Despite the fact that rate hikes might squeeze out a small portion of first-time homebuyers, the few who will be priced out will not be enough to derail the recover in US housing.
“We don’t want more of the volatility that was responsible for the economic collapse,” Hudson says. “constant, sustainable gains are what we’re after.”
What’s more, because the economy continues to grow and add jobs, “more qualified homebuyers with stronger credit will be more willing to leap into the marketplace too,” Hudson says.
#mortgage #mortgagecalculator #fedratehike #housingmarket #vahomemortgageloan #homeloansforveterans #gihomeloan #usingvahomeloan #federalvahomeloan #besthomeloansforveterans #howmuchisthevahomeloan #homevaloan #vahomeloanadministration #veteranhouseloan #howmuchisavahomeloan #vethomeloan #newvahomeloanprogram #vahomeloandetails #veteranhousingloan #usingavahomeloan #disabledveteranhomeloan #bestbanksforvahome #homeloansforvets #bestbanktogetavahomeloan #gibillhomeloan #VAMORTGAGE #vahomeloansforveterans #informationonvahomeloans #houseloansforveterans #guaranteedvahomeloan #usingthevahomeloan #homeloanveterans #buyingahomewithavaloan #homeloanadministration #vahomebenefits #gibillmortgage #MORTGAGEFORVETERANS #LOANSFORVETERANS #HOWTOQUALIFYFORVAMORTGAGE #HOWTOAPPLYFORAVAMORTGAGE #FederalReserveRateHikeBoardofGovernors #BESTVAMORTGAGELENDERS #VAHOMEMORTGAGE #vahomemortgageloanexpert #vahomemortgageloanexperts #VALOAN #VAloantaxexemptions #VAmortgageloantaxexempt #vapropertytaxexemption