Will 2015 be the year that the housing market sees first-time home buyers resurfacing since the housing crisis began? Across the board, analysts are predicting that 2015 will be the year many first-time home buyers will dip their toes in the property market.
As the housing market continues to calm and the volatile prices of 2014 stabilize, flipping property for the short term investor gets harder. Instead, market conditions point toward the advantage of buying for the long-term, making property more tempting for the first-time home buyer in 2015.
The lingering financial fallout caused by the Great Recession has inhibited Millennials’ entry into the home-owning market. But with rents rising faster than incomes, many Millennials are expected to start looking to buy their own homes.
Here are twelve, 2015 market trends predicted by industry experts that will encourage first-time home buyers in the coming year.
- In 2015, increases in employment prospects will permit younger buyers to return to the market and drive the ongoing housing recovery.
- As access to credit improves, considerably more young professionals will enter the market, becoming first-time home buyers.
- Instead of wasting money by putting it in someone else’s pocket, first-time home buyers want to put money into their own pockets by putting equity into their own property.
One Millennial couple say they are paying $200 less on their new mortgage than they paid monthly on their last rental and the house was smaller and the location not as good as their current home.
- As local economies continue to improve and employment rates go up, more first-time home buyers will enter the market.
- In 2015 homeownership will be a lot cheaper than renting, making that first-time home buy more appealing to Millennials. In 2014, only 33 percent of home purchasers were first-time buyers, the smallest percentage since 1987.
- More first-time buyers will be able to qualify for a mortgage, thanks to the new 3% down payment mortgages offered by Fannie Mae and Freddie Mac.
- Households headed by Millennials are expected to increase considerably in 2015, mostly as the economy continues to expand.
- With an upsurge of 2.5 million jobs predicted for next year, as well as a rise in household formation, more first-time home buyers will be inspired to enter the housing market.
- Existing-home sales are projected to rise 8 percent on average in 2015, as more buyers enter the market.
- Home prices are expected to continue to edge up in 2015.This will make it more difficult for first-time home buyers to get into the high-priced markets. Because of this, first-time home buyer action is expected to focus in markets with strong employment and affordability.
- Mortgage rates are expected to creep up in 2015; a standard 30-year fixed-rate mortgage will be in the region of 5 percent at the end of 2015. This rate increase will impact housing affordability for first-timer home buyers, pushing them to less-expensive areas.
- Texas will continue to be a good bet for real estate investment in 2015. Texas boasts the most cities (five) on the Forbes Best Buy list for 2015. Average home prices in Austin, Houston, Dallas, San Antonio and Fort Worth have been accelerating at a rate of 7% to 12%. Despite the plunge in oil prices, theses Texas cities present decent housing investment potential because of their diversified economies.