In the early months of every new year, experts of every kind make predictions, from what the weather will be like to which hairstyles people will favor. Some have very little basis in reality (do they ever really get weather predictions right?), while others are more substantial.
When it comes to real estate and mortgages, experts look at the trends of the previous year and the factors they’ve seen in the very beginning of the current one, and make educated guesses. Prospective buyers can use these predictions as a baseline, helping to determine if and when they should take the real estate plunge.
Here are five of the experts’ top predictions for 2015:
1) Rates will go down
Interest rates continued to fall throughout the end of 2014, and are now at or below 4%. Considering the recent trend, along with the various factors that determine mortgage rates (such as these), most mortgage pros agree that all signs point to low rates in 2015.
2) Refinancing will go up
Accordingly, many homeowners will look to refinance and take advantage of the low rates. Last year, as the rates continued to decrease, more and more homeowners looked to benefit from them through refinancing. This year should see even more refinance activity.
3) Mortgages will be easier to obtain
Thanks to recent changes by Fannie Mae and Freddie Mac regarding down payments, along with the FHA’s recent (and major!) 0.5% cut to mortgage fees, it will be much easier for many Americans to get a mortgage this year. More specifically, the Fannie and Freddie policies include higher loan-to-value ratios and easier mortgage approvals, and the FHA changes will allow for lower down payments. This means many first-time buyers will see their ownership dreams come true this year.
4) Boomerang buyers will be back
Boomerang buyers are those who previously owned a home, lost it to foreclosure, and then return to the market. While many Americans experienced these losses during the housing crisis, a large amount of them have now made it past the three to seven year foreclosure waiting period. This means even more buyers could be in the pool this year, making it a good year to sell.
5) Inventory will go up
Many financial experts predict that large real estate investors, following a very profitable 2014, will begin selling their properties to cash-in on the piles of money they’ve made. This could mean hundreds of thousands of single-family homes will be on the market, providing even more incentive for first-time or tentative buyers.
If the predictions are at all accurate, it seems 2015 will see more available homes, more buyers, lower rates, and easier mortgages; great news for buyers and sellers alike.
If you’re buying or selling a home in the Boston area and are in need of a mortgage, or have any mortgage-related questions, contact me anytime for help or advice.