A historic day for the Federal Reserve in late December raised short term interest rates for the first time since 2006, a sign that the Fed thinks the U.S. economy is doing well. But what does the hike mean for your mortgage and your pocketbook?
U.S. housing is intimately tied with job outlook
With a strong 2015 behind us, growth in the housing market should continue in 2016 — as long as job opportunities continue to grow to allow both first-time homebuyers and existing homeowners to participate in the market. That’s even with possible economic changes like rising interest rates.
“As the economy gets better, job and wage growth should keep pace. So even though mortgage rates will rise, they will still be low by historical standards and very affordable,” says National Association of Home Builders (NAHB) Chief Economist David Crowe in a news release. The organization’s Senior Economist Robert Denk noted that with the evolution past the immediate troubles of the bust, the nation will see “broad-based recovery.” Continue reading
A lot of great information was shared at the National Association of REALTORS® (NAR) conference, and one of the conference’s most interesting panels was also one of its first: Residential Economics Issues and Trends Forum — Will Housing’s Strength Continue into 2016?
Cost, demographics will shape real estate’s future
Jonathan Corr, the CEO of Ellie Mae, a tech company that processes as many as 1 in 4 mortgage applications, points to homebuyer demographics and closing costs as drivers of future change.
In 2007, the cost to close a loan was $3,400, whereas last year, the cost hovered around $7,000, according to Corr. The increases, mainly due to the Consumer Financial Protection Bureau as well as other regulators, will factor into the real estate deals of the future.
Demographically, Corr said that the more than 80 million millennials — the biggest generation since 76 million baby boomers — will set the pace in real estate.
“They are reachable, but not by old-school means,” Corr said. They key? Leveraging technology in tomorrow’s transactions. Corr predicts that everything to do with a real estate transaction will be done electronically in the next five years. Continue reading
Real estate is a hot topic every year, and the year 2015 was no exception. Here is a look back at this year’s U.S. and Canadian housing markets:
American gains, new laws take effect
The big story of the real estate year was recovery. San Francisco led the pack, where continued strength in tech sector jobs helped 2015 prices skyrocket above 2005 market highs. In California, Los Angeles and San Diego were close behind whereas outside of the state, cities like New York and Denver set the pace. In 2016, though, expect some changes. Continue reading