A Press release today from Fannie Mae is encouraging for the housing market in 2015 –
WASHINGTON, DC – Driven by strengthening private domestic demand, economic growth is expected to accelerate modestly this year and drag last year’s unspectacular housing activity upward, according to Fannie Mae’s (FNMA/OTC) Economic & Strategic Research (ESR) Group. Amid continued low gasoline prices, firming labor market conditions, rising household net worth, improving consumer and business confidence, and reduced fiscal headwinds, the economy is expected to climb to 3.1 percent in 2015, up from the Group’s estimate of 2.7 percent in the prior forecast. The stronger economic backdrop should lead to improving income prospects, underpinning a higher rate of household formation in 2015.
"Our theme for the year, Economy Drags Housing Upward, implies that both housing and the economy will pick up some speed in 2015, but that the economy will grow at a faster pace," said Fannie Mae Chief Economist Doug Duncan. “We believe this will motivate the Federal Reserve to begin measures to normalize monetary policy in the third quarter of this year, continuing at a cautiously steady pace into 2016 and 2017, likely keeping interest rates relatively low for some time."
Duncan went on to say, "Given historically low mortgage rates and a gradual easing of lending standards, our forecast calls for a 5.8 percent increase in total home sales for the year. Most of that is likely to come from growth in existing home sales, but we expect the rising share of new home sales to lead to a healthy increase in single-family construction of about 19 percent, or 765,000 units. Although we don’t view this as signaling a breakout year for housing, we do expect to see broad-based improvement in 2015 following a disappointing and uneven year for the housing recovery in 2014."
So, what does all of that mean for us in Southeastern Michigan? Well, we have started to see local headlines about our unemployment rate being the lowest in over 10 years; so I guess we are already a part of the national economic trend. Our housing market, at least in my little 8–Township patch has lagged seriously behind and has had a very low inventory of homes for sale for quite some time. Hopefully that will pick up some soon. It is actually very frustrating for people who want to move into this area right now – they can’t find a house.
or would-be sellers this is not carte blanche to jack up the price and try to gouge the buyers; but, it is a great time to sell for a good price more quickly that you might if you wait. Many people take their homes off the market for the winter, which is a mistake. Winter buyers are serious buyers, who aren’t out just kicking tires; they need a house. People wishing to sell should take advantage of that and the low inventory and list now. If you wait until warm weather you just be lumped in with a big crowd of homes coming on the market. Maybe you welcome competition in sports or business or elsewhere in life; real estate is not a place where competition is good (at least not for the sellers – buyers love it).
So the bottom line here is to get on the market if you’ve been holding off until things got better. They just did! You’ve put your life on hold long enough waiting for the market to improve. Well it did, so don’t wait to be dragged kicking and screaming into the market. You’ll just be left behind kicking and screaming; or maybe just crying.