Photo: Ron Cogswell/Flickr
Existing-home sales are forecasted to rise 7.4 percent this year, following an improvement economy, improvement in the job market and an increase in home prices, according to the National Association of Realtors.
NAR Chief Economist Lawrence Yun predicted that total existing-home sales will reach 5.3 million, up from an estimated 4.94 million in 2014 (figures for December 2014 will be released later this month). The national median existing-home price for 2014 will be approximately $208,000, a 5.6 percent increase from 2013. Yun anticipates the median existing-home price will rise about 4 percent in the new year, along with a 4 percent increase in rent. In the new-home sales segment, Yun forecast a significant 37 percent boost. “However, the caveat is that new home sales really have been struggling to come back around, so this is a delayed recovery in the new home sales market,” he said in a video published by NAR.
Over the past three years, home prices have risen cumulatively about 25 percent, “which boosts confidence in the market and traditionally gives current homeowners the ability to use their equity buildup as a downpayment towards their next home purchase,” Yun said. “Furthermore, first-time buyers are expected to slowly return as the economy improves and new mortgage products are made available in the marketplace with low down payments and private mortgage insurance.”
However, the pace of sales could be hampered by the predicted rise in interest rates, lenders being slow to ease underwriting standards and homeowners choosing not to move because of their current low interest rate.
The typical age of first-time homebuyers in 2014 was 31 years old, whereas the average age of repeat buyers was 53, according to data from NAR’s 2005-2014 Profile of Home Buyers and Sellers.