The latest predictions from Frank Nothaft and other Freddie Mac economists should please investors, real estate agencies, and everyone who benefits from the industry.
The Federal Home Loan Mortgage Corporation is a public government-sponsored enterprise that works with mortgage lenders to help people get lower mortgage costs and easier access to home financing. Best known as Freddie Mac, the institution is widely recognized as one of the best authorities for their economic niche. And their Economic and Housing Market Outlook in November is heartening.
The economy as a whole is expected to sustain about a 3% growth next year. Reasons cited were lower energy costs supporting consumer spending and investment from businesses, loosening of the strict credit requirements enacted since the market crash, and an overall better consumer outlook and confidence in the US economy.
According to chief economist Nothaft, these conditions will create better paying jobs, more new jobs, and more money to spend on home buying or upscaling.
Other predictions from Freddie Mac for 2015 include:
1. Home prices and appreciation that have been running around 9.3% will slow to 4.5% by the end of 2014. While an individual homeowner/seller might not be too pleased with this, it is a good thing for the industry as a whole. Combined with certain increasing mortgage rates, a "too-high" appreciation will make it harder for buyers to afford a home.
2. Mortage rates will increase in 2015, probably rising to an average of 4.6%, and perhaps as much as 5% by the end of next year. Presently below 4%, this is a pretty big increase.
3. The building of new single-family homes is expected to rise by about 20% in the coming year, creating an increase of about 5% in total home sales.
4. While mortgage refinances of single family homes should slow (and has already slowed), new mortgages for condos and townhomes have surged by around 60% in the last 3 years. Freddie Mac is expecting this surge to continue in 2015...increasing again by about another 14%. This is particulary great news for resort areas like Pensacola where condos are so plentiful and need a boost in sales.
These are all good signs that Pensacola area real estate will continue to get better in the coming years and help the public to feel better about home ownership!
