Connect with us

Hi, what are you looking for?

The Real DailyThe Real Daily

NAR Reports

NAR releases 2016 forecast: What’s in store for this year?

2015 was a great year for housing, but what will be the wins and challenges in 2016? We learn from the National Association of Realtors what the year has in store.

After a dramatic housing crash and a slow, painful recovery, 2015 marked the real estate sector’s best year in nearly a decade. The National Association of Realtors (NAR) points to 2016 as one of continued improvement, forecasting that existing home sales will expand “at a moderate pace,” and that pent up demand could put a dent in the “affordability pressures and meager economic growth” the trade group has been warning about in recent years.

Below, NAR Chief Economist, Dr. Lawrence Yun offers his view of what is in store for 2016:

A visual look at the 2016 housing forecast

2016 nar housing forecast

Market factors to take into account

As mentioned in the video, Dr. Yun points to indicators other economists agree will impact housing in 2016: pent up demand, sustained job growth, and improving inventory conditions.

But it’s not all sunshine and rainbows, no, Dr. Yun warns that while sales will rise, increasing mortgage rates and an upturn in home prices could outpace wages. Further, global economic conditions could hold back sales in 2016 from achieving what they would otherwise. Just this month, China has dominated headlines in a way that even mainstream, non-cable-tv-watching Americans are fully aware of.

Advertisement. Scroll to continue reading.

NAR will keep a close eye on these global factors this year that we all thought felt so far away in the past, as they influence our own markets.

“This year the housing market may only squeak out 1 to 3 percent growth in sales because of slower economic expansion and rising mortgage rates,” Yun said. “Furthermore, the continued rise in home prices will occur due to the fact that we will again encounter housing shortages in many markets because of the cumulative effect of homebuilders under producing for multiple years. Once the spring buying season begins, we’ll begin to feel that again.”

One month left to report

NAR soon releases the final month of data for 2015, which Dr. Yun expects to indicate existing home sales up 6.5 percent for the year. This would mark a pace of around 5.26 million, the highest level since 2006 before the historic housing crash. NAR is quick to point out, however, that 2015 does end the year with sales 25 percent below the prior peak set in 2005.

The national median existing-home price for all of 2015 is expected to close at $221,200, up around 6 percent from 2014.

In 2016, existing sales are expected to grow between 1 and 2 percent (5.30 to 5.40 million) and prices between 5 and 6 percent.

#2016forecast

Advertisement. Scroll to continue reading.

Tara Steele is the News Director at The American Genius, covering entrepreneur, real estate, technology news and everything in between. If you'd like to reach Tara with a question, comment, press release or hot news tip, simply click the link below.

Advertisement

The Daily Intel
in your inbox

Subscribe and get news and EXCLUSIVE content to your email inbox.

Advertisement

KEEP READING!

Real Estate Big Data

The increasing interest rates have been a portend of trouble for many, but this latest hike has many concerned about the potential future.

Op/Ed

NAR's Code of Ethics emphasizes that "Under All is the Land," and being good stewards of this land is now critical.

Homeownership

It may come as a shocking fact that almost half of the young adults in the US choose to continue to reside with their...

Real Estate Associations

It's been a long time coming, but the call for mentorship in real estate has been realized thanks to the new NAR program. Here's...

Advertisement

The Real Daily is honest, up to the minute real estate industry news crafted for industry practitioners - we cut through the pay-to-play news fluff to bring you what's happening behind closed doors, what's meaningful to your practice, and what to expect in the future. We're your competitive advantage. The American Genius, LLC Copyright © 2005-2023