A1 B MILLENNIALS WILL DRIVE HOUSEHOLD FORMATIONS:
Both population and households have grown at a slightly higher pace in 2014 and this trend will continue in 2015 with modest improve- ment over this year’s increases. Households headed by millennials will see significant growth as a reflection of economic
gains.Millennials will also drive two-thirds of household formations over the next five years. The addition of 2.75 million jobs in 2015, along with increased household formation, will be the two key factors driving first-time buyer sales.
A2B EXISTING HOME SALES WILL INCREASE BY EIGHT PERCENT:
Existing home saleswill grow as more buyers enter the market motivated by a clear belief that both rates and prices will continue to
rise.The in- crease in home sales year-over-yearwill be similar to 2012, but this time the composition of properties sold will be more normal with minimal levels of distressed properties. While the majority of housing activity will be driven by baby boomers preparing for retirement, millennials will account for 65 percent of first-time home buyer sales in 2015.
A3B HOME PRICES WILL GAIN BY 4-5 PERCENT:
Low inventory levels and demand driven by improved employment opportunities will push home prices up next year. While first-time home buyers have many economic factors working in their favor, in- creasing home prices will make it more difficult to get into high priced markets such as San Francisco and San Jose, Calif. As a result, first- time home buyer activity is expected to concentrate in markets with strong employment and affordability, such as Des Moines, Atlanta and Houston.
A4B MORTGAGE RATES WILL END THE YEAR AT 5 PERCENT:
Mortgage rates will increase in the middle of2015, as the Federal Re- serve increases its target rate by at least 50 basis points before the end of the year. Thirty year fixed rate mortgages will reach five percent by the end of the year. One year adjustable rate mortgages (ARMs) will rise minimally. Lower ARMinterest rates will influence an uptick in buyer interest for adjustable and hybrid mortgages.While still at his- toric lows, rate increases will affect housing affordability for first-timers trying to break into the housing market and will be another factor pushing them to less expensive locales.
A5B HOME AFFORDABILITY WILL DECREASE 5-10 PERCENT:
Affordabilitywill decline in 2015by 5-10 percent, based on home price appreciation and increasing mortgage interest rates. This declinewill be somewhat of fset by increasing incomes. When considering historical norms, housing affordability will continue to remain strong next year.
www.garealtor.com ATLANTA The Atlanta-Sandy Springs market !
was among the 10 markets that
Realtor.com singled out for 2015, due to positive gains in household growth (ranks seventh in forecasted household growth over the next five years) and home sales (11 percent increase). “The growth expected in 2015 is
widespread, but as we put together our forecast, ten local markets stood out as especially primed and ready for significant acceleration across housing metrics in 2015,” Smoke said. “The markets on this list range from big cities with older housing stock, big and mid-size cities with substantial levels of new construc- tion, and up and coming markets appealing to young professionals for their job growth and high afford- ability. Los Angeles and Washington, D.C.,were selected for their antici- pated increases in home sales and household formation. While Des Moines, Iowa, may seem like an odd addition, it’s incredibly high afford- ability and high levels of home ownership among millennials set the stage for strong housing performance next year.” Rounding out the top 10 were Dallas, Denver, Houston, Phoenix, Minneapolis, and San Jose, Calif.
GEORGIA REALTOR® I9
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