Hello Tampa Bay,
Here are predictions for 2016:
1. 2016 = NORMAL
We are expecting a healthy growth in prices, although at a slower pace compared to recent years. After many years of abnormal trends, market conditions are becoming more normal. I expect that home prices will increase at a more normal rate due to the market being more balanced. I predict that home values will increase 4-5% in 2016.
2. Higher Rent
Rents have been climbing at an explosive rate, increasing more rapidly than home prices. This trend will continue to enlarge the gap of affordability of buying versus renting.
3. Higher Mortgage Rates
Mortgage rates are expected to be pushed higher, but the level of increase should be manageable for most buyers. I predict that the 30-year fixed-rate mortgage will end 2016 about 50 basis points higher than today at around 4.5%.
4. Entry-level New Homes
New construction will continue the trend towards entry-level homes. Builders will continue to shift to more affordable homes for entry-level buyers. This is largely due to increased access to credit, as well as changing demographics.
Milennials (ages 25-34) will continue to play a major force in the market. They represented 1/3 of home buyers in 2015 at nearly two billion sales.
Michael A. Melnyk