Economists, the National Association of Home Builders, and the
National Association of Realtors all seem to agree upon one thing at the
moment – the real estate market is definitely improving. There just
seems to be a lot of disagreement as to how fast the market is improving
or will improve in 2015 and which buyers will get the most benefit from
this improvement. The Wall Street Journal’s parent company which just
purchased Move, Inc., the owner of Realtor.com, went straight to the
horse’s mouth to hear from Jonathan Smoke, the chief economist for
Realtor.com to get his take on the current projections. Below are the
results:
National Association of Realtors: Predicts a 41% increase in new home sales
National Association of Home Builders: Predicts a 28% increase in new home sales
Jonathan Smoke, Economist Realtor.com: Predicts a 25% increase in new home sales
Smoke has a few reasons why he takes a cautiously optimistic
viewpoint of the current and future real estate market. One reason is
that there is still a 4.5 – 5 month inventory of vacant new homes to be
sold, and prices for these homes have not yet stabilized. The second
reason is that even though employment numbers have grown, new households
which would have been established by college graduates may not
materialize the way that economists think because of down payment
requirements on tight credit home loans and student debt costs which
have still not been resolved by Washington D.C. In other words, these
potential home buyers would not have the capital on hand to invest in
purchasing a new home. The last reason why Smoke thinks that the
percentage of new home sales will be smaller than both the NAHB and the
NAR is because builders will not be able to “ramp up” and start building
new homes at a rapid pace. Most builders divested themselves of empty
lots during the Recession because of the cost of keeping them and paying
taxes was a drain on their finances. Therefore, they are not ready to
begin building multiple homes at once like they once were as production
builders.
However, even the cautiously optimistic increase of 25% for new home
sales is still good news for the real estate market. Another piece of
good news is that economists think that the first-time home buyer market
may be making a comeback. News has been filtering out of Washington
D.C. that there are programs being created for low-income and
moderate-income buyers that will give them down payment assistance once
again. The rumor also is that mortgage companies are going to loosen up
on the credit requirements in 2015 as well, but there have been no
definite indicators of that just yet. Because of the positive
unemployment numbers that have been reported over the last two quarters,
home buyers with good or excellent credit who have savings are now able
to go ahead and buy a home because they also now have steady income.
All of these factors have been progressively building builder confidence
and increasing the permits, starts, and production of new homes
especially in the Greater New Orleans area. For More Information about buying a new home, Contact Ron Lee Homes at 985-626-7619 or E-mail Info@RonLeeHomes.com.
Click Here for the Source of the Information.
No comments:
Post a Comment