{ Market Trends }
Interest rates, affordability and millennial home buyers will feature in housing trends this year
Rising interestrates,affordability issues in California, a“normalized” national housing market and the emergence
of millennial buying power are among the real estate trends buyers and sellers will face in 2016.
Interest rates The average interestrate for a30-year fixed mortgagewill rise slightly to 4.5%. That will still be considered near historicallylow levels,but the Federal Reserve’sDec. 16 announcement to raise the federal funds rate, while it doesn’tdirectlydictate mortgagerates,may spur lenders to raise their rates.Expert advice: Buy sooner rather than later.
National The 2016 housing market is on pace for moderate but solid growth, according to the National Assn. of Realtors.The association forecasts both price acceleration and existing home sales to slowto3%. According to N.A.R., which credits the slowing pace to higher mortgagerates and loweraffordability,“Ee areentering anormal but healthyhousing market.”
California California’shousing market will continue to improveinto 2016,but ashortageofhomes on the market will makethem increasinglyless affordable, according to the California Assn. of Realtors.It’s2016forecast foresees an increase in existing home sales of 6.3% next year,while the median home price will increase 3.2% to $491,300.
Millennials Millennials will be largestdemographic of home buyers in 2016,according to the The National Assn. of Realtors.They already represent 30% of the existing home market.Powered by increasing income, they will look to meet the needs of their growing families.Commute time and apreference for older homes have millennials looking in city centers and nearby suburbs.