Mortgage

Freddie Mac: 2015 best year for home sales in 8 years

This goes for new home construction

The majority of homes sold in 2015 will be sold between now and June as the housing markets begins the start of the spring homebuying season. According to Freddie Mac’s March 2015 Economic & Housing Market Outlook, 40% of all home sales for the year will happen over the next four months.  

"This month kicks off the spring homebuying season. These next few months will essentially tell us whether or not 2015 will be a good or bad year for housing markets,” said Len Kiefer, deputy chief economist with Freddie Mac.

“Overall, we're feeling good about housing and we expect this year to be the best year for home sales and new home construction since 2007 when we saw total home sales about 5.8 million for the year," said Kiefer.

Here are the reasons Freddie Mac is optimistic:

High affordability

About 80 percent of metro markets in the U.S. are affordable, based on data through the 4th quarter of 2014 on the three primary drivers of affordability: house prices, interest rates and income.

Improving labor markets    

Over the twelve months ending in February 2015 the U.S. economy added nearly 3.3 million jobs, the fastest pace since 2000. And with labor markets tightening we might be starting to see wages and incomes rise.

One key demographic segment—millennials aged 25 to 34—have started to see their job prospects improve recently.

Rising rents

Many current residents are debating if the benefits to moving are finally strong enough to purchase a home. And looking at recent study findings, many feel that it could make financial sense to buy today.

Expanded Credit Availability

Freddie said it believes there will be financing available to capture the people exiting the rental market. Broader access to credit will be driven by a confluence of factors, not just the new Freddie Mac Home Possible Advantage initiative. 

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