Page 30 - enLIGHTenment January 2016

housing forecast

2016
Real Estate Trends for

A
ccording to an article wri en by Person- If interest rates top 5 percent, Blomquist expects

al Finance Reporter Daniel Goldstein a surge of una ordable markets, according to the

for Market Watch last month, home Market Watch story.
prices are predicted to stay the same
On average, housing prices will rise by 3 per-

rather than increase this year. “As the Federal Re- cent nationally in 2016, compared with 6 percent
serve worries less about stimulus and more about in 2015, according to Realtor.com, which is owned

keeping in ation in check with an economy that’s by Market Watch. “Healthy economic indicators

nally producing jobs, interest rates will go up, will be tempered by lack of access to credit and
increasing the cost of credit for those seeking to rising home prices, which will ultimately limit

purchase a home,” Goldstein wrote.
housing demand and growth,” said Realtor.com
“A ordability is going to be a much bigger hin- economist Jonathan Smoke in an analysis issued

drance going into 2016,” Daren Blomquist, VP/ Dec. 2 and reported in Market Watch.

Research at realty research group RealtyTrac, told Ralph McLaughlin, an economist with real estate
Goldstein. Blomquist said that currently about 3 research group Trulia.com, was quoted in Market

percent of the nearly 600 U.S. counties his rm Watch as predicting more Millennials will be look-
tracks have home prices that are “una ordable” to ing to buy a home between 2016 and 2018.

the average American weekly wage earner (who “Most borrowers of this age group are waiting

made $1,056 a week in the rst quarter of 2015).
for a work promotion or to build up enough sav-
ings to buy,” McLaughlin said in the article. “We

don’t expect a big rush to jump in, but it’s going to
be an incremental improvement.”
On average, housing prices will rise by
In the Market Watch article, McLaughlin men-

3 percent nationally in 2016, compared with tioned the job market prospects for Millennials
may be hurt by the fact that Baby Boomers aren’t
6 percent in 2015.
— Realtor.com
retiring as quickly as the previous generation and,
as a result, aren’t selling their homes.

“Baby Boomers are working later in life and it

keeps a cap on the younger generation,” McLaugh-
lin said in the article. “How can they move up, if
KEEP AN EYE ON GEN Y
they are staying in place?”
As a result, remodeling is on the rise. Kermit
Gen Y (people born during the early
Baker, an economist with the American Institute
1980s to the early 2000s) make up the
of Architects (AIA), noted in Market Watch that
largest percentage of rst-time home Baby Boomers are more likely to invest $75,000
buyers at 68 percent and the largest
in a bathroom or $150,000 in a kitchen than
amount of home buyers overall at
use the equity to purchase a larger home with a
32 percent, which is larger than all
higher-rate mortgage.
Baby Boomers combined.
The AIA is estimating home improvement proj-
ects in 2016 will reach a new high, exceeding the

record $325 billion set this year. It could also top
$350 billion by 2017, the AIA predicts. There

will also be more remodeling of high-end rental

properties as interest rates dri higher and make
renting more a ractive for some. “The remodel-

ing demand in the high-end rental market is really
strong,” says Baker in the Market Watch.
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28 enLIGHTenment Magazine | January 2016
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