After several bumpy years, the housing market should continue to smooth out in 2015, one of the nation’s leading housing economists says.
In his predictions for 2015, Zillow chief economist Stan Humphries said he expects home values to rise 2.5% next year -- positive territory but well below the 6% clip seen over the last 12 months. That slower pace, coupled with home builders shifting to construct more houses at lower price points than they have been, should help pull more first-time buyers into the market, Humphries predicted.
Humphries also said he expects more first-time and younger buyers will take the plunge on homeownership because the cost of renting will keep going up. He’s predicting rents to climb 3.5% -- faster than for-sale prices -- making the security of a fixed mortgage payment more attractive to more “otherwise content renters.”
All of that, he said, means that by the end of 2015, millennials -- people 35 and younger -- will be the largest chunk of the nation’s homebuying market, overtaking their older siblings in Generation X. And they’ll be buying in a more stable market, which will help serious sellers too.
“This more balanced market will be smoother sailing for everyone, both for buyers in search of a competitive advantage and for sellers who turn around and become buyers themselves,” Humphries wrote.
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