We are in September and new year is not too far. Peak housing is almost winding down in all parts of the country and looking ahead on how it’s going to be in 2015. Here is some thoughts about 2014 and forecast for next year from NAR Economist.

Despite hitting a soft spot in the first quarter, home sales are expected to make a strong showing in the second half of 2014.

Past few years of economic recovery “difficult but meaningful.” Unit sales are currently down 5 percent year-over-year, but he expects 2014 to end up close to last year’s totals at a little more than 5 million units sold.

Gross domestic product (GDP) was negative in the first quarter, but bounced back in the second. Although Yun would like to see consistent economic growth above 3 percent – it’s currently around 2 percent. “It’s moving in the right direction,” he says. “We’ve recovered all the jobs lost in downturn and new jobs are being created.”

The total housing inventory at the end of June rose 2.2 percent to 2.30 million existing homes for sale. Research shows that consumers feel more confortable visiting 10 to 15 homes before making a purchase decision, and as inventories come back, so will buyer confidence and sales.

Yun also made the following three forecasts:

Forecast 1: Higher inflation and higher interest rates. The Federal Reserve is planning to end its purchasing of Treasury and mortgage-backed securities in October. Yun expects interest rates to increase in 2015. He also expects Consumer Price Index (CPI), which measures inflation, to increase 3.5 percent in 2015.

Forecast 2: Multi-year housing expansion. The population is on the rise. The U.S. gained 34 million people since 2000, but home sales were 5.2 million in 2000 and 5.1 million in 2013. The pent up demand will eventually equate to additional homes sales over the next few years, Yuns says.

Forecast 3: Continued inequitable wealth distribution. Household net worth is at an all time high, but only for the 10 percent of U.S. population that has investments in the stock market. At the same time, rents are rising and incomes are generally stagnant.

All the 3 points mentioned in forecast are valid. With higher inflation and high interest rates might put some pressure on the housing but it will be healthy one to stabilize the real estate industry and bring good consumer to housing market. Houston market will continue to see the demand like last few years but home prices almost reached peak period and don’t seem to be going anywhere. It will stabilize and help consumers to compare and make decision properly.

Last few months inventory is up in many areas but still competition is fierce if the price and house is good spot so there is always a demand for good neighborhood and schools. That’s normal and competition should cool down this winter and next year would expect to be healthy demand.

About Vijaianand Thirnageswaram

I am a Proud Realtor of Texas, trying to guide and help clients to find their dream home and educate them to buy them for right price. I am also a Candidate for CFP who has more financial knowledge which allows me share and educate clients in any financial decision making process.

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