Home Purchasing Trends in 2015 – Advice from Our Real Estate Agents
Our real estate agents at SAGE Realty LLC have had the first half of 2015 to get a feel for the market and it is become quite evident that although home prices are rising, they are doing so at a much slower pace than anticipated. In contrast, mortgage rates, are currently expected to be on a straight rise upwards. With prices and mortgages high and a short supply of homes, our experts take a look at what is in store for the housing market in the second half of 2015 below.
The biggest reason for the high price of homes is the short supply, and as it stands homebuilders show no signs of ramping up production for the next six months. Homebuilders want to hold on to their pricing power, especially because they currently face their own hardships including limited credit and a shortage of skilled labor. That is not to say that there will not be any increase in new construction, there just will not be enough to completely solve the supply problem.
What to Expect
- Low home production
- High demand for rentals
- Increased independent lender business
The Future for Renters
Renters expecting to see some improvement should keep their expectations low – although there have been more deliveries of new units and multifamily construction, this creates a high demand and occupancy is at a record high. This means that landlords have more power to control pricing the way they desire and with high rent prices, saving for a down payment will get harder.
First-time young buyers will continue to face struggles in the second half of the year with higher price tags, slow wage growth and high student debt loads. This will affect the market negatively, as the housing market requires these first-time buyers in order to continue to thrive. Without them, the whole process slows down.
The biggest shakeup to the housing market in the second half of 2015 will likely be an increased focus on mortgage credit availability. With lenders facing stricter regulations and rising rates, they will be hungrier for business. Independent lenders will likely take on more business due to their tendency to be more flexible with credit options. Buyers are anxiously awaiting more competition and less onerous underwriting requirements.
The rising price of houses and short supply of homes ultimately places greater power in the hands of homebuilders and landlords. Renters will have it tougher in the second half of 2015 and until housing production increases, this landscape is not likely to get any easier. For those looking for advice or help, our real estate agents at SAGE Realty LLC can use our knowledge of the market to help you get what you need.
For more information or further questions, give us a call at 610-687-4000.