NAR predicts modest home sale increases in 2016
WASHINGTON – Jan. 12, 2016 – Following the housing market's best year in nearly a decade, existing-home sales are forecast to expand at a more moderate pace in 2016 as pent-up buyer demand combats affordability pressures and meager economic growth, according to National Association of Realtors®(NAR) Chief Economist Lawrence Yun.
In an NAR video, Yun discusses his expectations for the U.S. economy and housing market in 2016. He cites pent-up demand, sustained job growth and improving inventory conditions as his reasons for an expected gain (from 2015) in new and existing-home sales. A NAR-created infographic provides an overview of Yun's forecast.
Despite his forecasted increase in sales, Yun cites rising mortgage rates, home prices that still outpace wages and shaky global economic conditions as headwinds that will likely hold back a stronger pace of sales.
"This year, the housing market may only squeak out 1 to 3 percent growth in sales because of slower economic expansion and rising mortgage rates," Yun says in the video. "Furthermore, the continued rise in home prices will occur due to the fact that we will again encounter housing shortages in many markets because of the cumulative effect of homebuilders under producing for multiple years. Once the spring buying season begins, we'll begin to feel that again."
With one month of data remaining for 2015, Yun expects total existing-homes sales to finish the year up 6.5 percent from 2014 at a pace of around 5.26 million – the highest since 2006, but roughly 25 percent below the prior peak set in 2005 (7.08 million).
The national median existing-home price for all of 2015 will be close to $221,200, up around 6 percent from 2014. In 2016, existing sales are expected to grow between 1 and 2 percent (5.30 to 5.40 million) and prices between 5 and 6 percent.
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