FORBES PREDICTIONS FOR SECOND HALF OF 2015

1. Demand will continue – it is still cheaper to own than rent; an increase in income, as a result of a more positive job market, has created more buyers;
2. Low inventory will continue – developers are not building enough new homes; many potential sellers cannot sell for a profit and are keeping their homes off the market;
3. Competition for homes will continue – according to the NAR (National Association of Realtors), forty-six percent of homes sold in April were on the market less than a month;
4. Prices will continue to rise to around 5.5% through December – the NAR reports the median existing-home sales price up 8.9% over the previous year;
5. Mortgage rates will be 4-5% by the end of the year – still low compared to the 1980’s when they were above 10%.

WHAT THE HECK IS A BOOMERANG BUYER?

…..according to DSNews, these are buyers who “were negatively affected by the housing crisis, and they include those who are 60 or more days delinquent on a mortgage loan, have had a mortgage loan modified, or have lost a home through foreclosure, shortsale, or deed-in-lieu of foreclosure”. More than 1.5 “boomerang buyers” could re-enter the housing market in the next three years and an estimated 2.2 million over the next five years.

Source: DSNews.com

LENDERS ARE OPTIMISTIC

According to Fannie Mae’s second quarter 2015 Mortgage Lender Sentiment Survey, lender’s remain positive about purchase mortgage demand and their profit margin during the next three months. According to the survey, more lenders report credit loosening rather than tightening. A whopping 70% expect home prices to go up over the next 12 months.
Source: CAR Market Matters

MORE CALIFORNIANS CAN AFFORD TO BUY HOMES

More Californians found it easier to purchase a home in the first quarter of 2015 because of lower interest rates and stabilizing home prices, according to the California Association of Realtors. Up from 33% in the first quarter a year ago, more California buyers could afford to purchase a median-priced single-family home in the first quarter of 2015. “Home buyers needed to earn a minimum annual income of $87,700 to qualify for the purchase of a $442,430 statewide median-priced, existing single-family home….” .

Source: C.A.R. Market Matters