2016 Predicted to Be Housing’s Golden Year
Officials from mortgage giant Freddie Mac have made a bold prediction: This year housing starts and home prices will reach their highest levels since 2006.
The main reasons behind its bullish forecast is low mortgage rates, an improving job market, and a gradual increase in housing supply.
The 30-year fixed-rate mortgage remains well-below 4 percent this year. This week it averaged 3.71 percent.
For home sellers, they’ll be able to enjoy more home price increases.
Also, gains in employment across the country will help to fuel hotter housing markets, according to Freddie Mac. The unemployment rate dropped below 5 percent recently.
That said, challenges remain for the housing market, particularly with wage growth. Wages remain “anemic, barely keeping pace with inflation,” Freddie Mac officials caution.
Despite some headwinds, officials remain mostly upbeat. The “nation’s housing markets should sustain their momentum from 2015 into 2016 and 2017,” the outlook notes.