Vero Beach housing is expected to strengthen along with the economy in 2015, according to Freddie Mac's U.S. Economic and Housing Market Outlook for November.
Frank Nothaft, Freddie Mac's chief economist, said recently that “the good news for 2015 is that the U.S. economy appears well-poised to sustain about a 3 percent growth rate in 2015 — only the second year in the past decade with growth at that pace or better.”
Predictions for Vero Beach Housing for 2015
Mortgage rates: Interest rates will likely be on the rise next year. In recent weeks, the 30-year fixed-rate mortgage has dipped below 4 percent again. But by next year, Freddie projects mortgage rates to average 4.6 percent and inch up to 5 percent by the end of 2015.
Home prices: By the time 2014 wraps up in a few weeks, home appreciation will likely have slowed to 4.5 percent this year from 9.3 percent last year. Appreciation is expected to drop further to an average 3 percent in 2015. Continued house-price appreciation and rising mortgage rates will dampen affordability for home buyers, according to Freddie economists. Historically speaking, that's moving from 'very high' levels of affordability to 'high' levels of affordability.
Housing starts: Homebuilding is expected to ramp up in the new year, projected to rise by 20 percent from this year. That will likely help total home sales to climb by about 5 percent, reaching the best sales pace in eight years.
Single-family originations: Mortgage originations of single-family homes will likely slip by an additional 8 percent, which can be attributed to a steep drop in refinancing volume. Refinancings are expected to make up only 23 percent of originations in 2015; they had been making up more than half in recent years.
Multi-family mortgage originations: Mortgage originations for the multi-family sector have surged about 60 percent between 2011 and 2014. Increases are expected to continue in 2015, projected to rise about 14 percent.
Consumers are more upbeat and businesses are more confident, all of which should lead to faster economic growth in 2015. And with that, the economy is expected to produce more and better-paying jobs, providing the financial wherewithal to support household formations and Vero Beach housing activity.
Stay tuned here, we'll update you as the calendar turns to 2015 on Vero Beach housing and the trends affecting the numbers for the new year.
Follow news on Vero Beach housing by periodically checking back in the Vero Beach Real Estate News section of our website under Vero Beach Real Estate Categories.
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