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Buying a home in 2016? Housing Market Predictions for 2016.

(Published on - 12/8/2015 7:01:46 PM)

 According to CoreLogic's chief economist Dr. Frank Nothaft, U.S. home sales and prices are up, rents continue to rise, and vacancy rates will stay low - all in 2016.

CoreLogic's newly released 2016 Outlook for Housing, which provides predictions and forecasts for the housing economy, says we can expect to see the following five features in next year's U.S. housing market.

 Home sales and home prices will likely increase

Not only is the rental market hot, but overall purchase demand may lift 2016 home sales to the best year since 2007. Nationally, home prices will likely rise at a quicker rate than inflation, but not at the same rate as last year. The CoreLogic Home Price Index showed a year-over-year increase of 6 percent in the last 12 months; however, 2016 is only expected to see increases of 4-5 percent. This increase in home sales and home prices can be attributed to the improved economy, which has enhanced homeowners' feelings of financial security. 

 Interest rates will gradually move higher

Homeowners who have adjustable-rate mortgages or home-equity loans will most likely see a rise in their interest rate because the Federal Reserve is expected to raise short-term interest rates approximately one percentage point between now and the end of 2016. Fixed-rate mortgages will also rise, perhaps up one-half of a percentage point between now and the end of 2016, reaching 4.5 percent for 30-year loans. Despite this increase in interest rates, mortgage rates will remain historically low. 

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