SAN JOSE, Calif., Dec. 2, 2015 /PRNewswire/ -- New home
construction and moderate gains in the existing home market will
deliver the necessary one-two punch to push total home sales to the
highest levels since 2006, according to the 2016 housing forecast
issued today by realtor.com®, a leading destination of online real
estate services operated by News Corp [NASDAQ: NWS, NWSA] [ASX:
NWS, NWSLV] subsidiary Move, Inc. The forecast also identifies the
top 10 markets for growth, as well as expectations for home prices
and sales, interest rates and new home sales and starts.
2016 national housing outlook
The 2016 housing market
is expected to be a picture of moderate, but solid growth as
acceleration in existing home sales and prices both slow to 3
percent year over year due to higher mortgage rates, continuing
tight credit standards, and lower affordability. The new
construction market will see more significant gains in the coming
year as new home starts increase 12 percent year over year and new
home sales grow 16 percent year over year. Total sales for existing
and new homes will reach 6 million for the first time since 2006, a
result of a strong gross domestic product increase of 2.5 percent
and continued job creation. These healthy economic indicators will
be tempered by lack of access to credit and rising home prices,
which will ultimately limit housing demand and growth. [See table 1
for full forecast.]
"Next year's moderate gains in existing prices and sales, versus
the accelerated growth we've seen in previous years, indicate that
we are entering a normal, but healthy housing market," said
Jonathan Smoke, chief economist for
realtor.com®. "The improvements we've seen over the last few years
have enabled a recovery in the existing home market, but we still
need to make up ground in new construction, which we could begin to
see in 2016. New home sales and starts will bring overall sales to
levels we have not seen since 2006 and will help set the stage for
a healthy new home market."
Who are the 2016 home buyers?
Next year's standout
year in total sales will be driven by three distinct segments of
home buyers – older millennials (25-34 years old), younger gen
X'ers (35-44 years old), and retirees (65-74 years old), according
to Smoke.
Millennials: They are expected make up the largest demographic
of home buyers in 2016, having represented 30 percent of the
existing home market. Driven by increasing income, millennials will
seek out homes that meet the needs of their growing families –
putting the most weight on the safety of the neighborhood and the
quality of the home. Commute time and a preference for older homes
have these buyers looking in city-centers and closer-in suburbs.
According to realtor.com®'s proprietary research, the following
markets are expected to be some of the most sought out markets for
millennial home buyers in 2016 due to their large numbers of
millennials, strong employment growth, and relative
affordability.
1.
Atlanta-Sandy Springs-Roswell, Ga.
|
2.
Pittsburgh
|
3.
Memphis, Tenn.-Miss.-Ark.
|
4.
Boston-Cambridge-Newton, Mass.-N.H.
|
5.
Austin-Round Rock, Texas
|
Young gen X'ers: Accounting for 20 percent of home purchases in
2015, buyers between the ages of 35-44 will be back in the market
again likely making up the second largest population of buyers in
2016. These buyers have rebounded from the financial crisis and are
entering their prime family-raising and earning years. More than
two-thirds of the buyers in this age group already own a home. They
will be moving out of a starter home into a larger home or more
desirable neighborhood. All the markets on this list are seeing an
uptick in growing families, declining unemployment and growing
household incomes.
1.
Atlanta-Sandy Springs-Roswell, Ga.
|
2.
Denver-Aurora-Lakewood, Colo.
|
3.
St. Louis, Mo-Ill.
|
4.
Charlotte-Concord-Gastonia, N.C.-S.C.
|
5.
Columbus, Ohio
|
Individuals or couples looking to relocate or retire: This group
is expected to make up the third largest home buying segment in
2016. Ages 65-74, they will be selling their current home in an
effort to downsize and lower their cost of living. Last year, they
represented 14 percent of home buyers. They will likely put their
home up for sale at the start of the home-buying season in March or
April, and aim to make a home purchase following the sale of their
home. This age cohort has a very strong preference for newly
constructed homes and put the most weight on their ability to
customize their home. Homes in the following markets are expected
to see the most retiree buying activity in 2016 due to a large
share of population as well as rapidly rising home values.
1.
Boston-Cambridge-Newton, Mass.-N.H.
|
2.
Sacramento--Roseville--Arden-Arcade, Calif
|
3.
San Diego-Carlsbad, Calif.
|
4.
North Port-Sarasota-Bradenton, Fla.
|
5.
Cape Coral-Fort Myers, Fla.
|
Top 10 growth markets and other
winners
According to Smoke, several markets are poised for
substantial growth in prices and sales. Each market demonstrates
strong demand dynamics, evidenced by 60 percent more listing page
views on realtor.com® than the U.S. overall and inventory that
moves 16 days faster than the U.S. average. Surging demand in each
market can be attributed to growing household formation, a
prosperous job market, and low unemployment rates as well as large
populations of millennials, young gen-X'ers and retirees.
Realtor.com®'s 10 hottest markets for 2016 are:
1.
Providence-Warwick, RI-Mass.
|
6. New Orleans-Metairie, La.
|
2. St. Louis,
Mo.-Ill.
|
7. Memphis, Tenn.-Miss.-Ark.
|
3. San
Diego-Carlsbad, Calif.
|
8. Charlotte-Concord-Gastonia,
N.C.-S.C.
|
4.
Sacramento--Roseville--Arden-Arcade, Calif.
|
9. Virginia Beach-Norfolk-Newport News,
Va.-N.C.
|
5. Atlanta-Sandy
Springs-Roswell, Ga.
|
10.
Boston-Cambridge-Newton, Mass.-N.H.
|
Table 1: Realtor.com® Forecast for Key Housing and Economic
Indicators
Housing
Indicator
|
Realtor.com® 2016
Forecast
|
2015 Expected
Actuals
|
Home price
appreciation
|
3%
increase
|
6%
increase
|
Mortgage
rate
|
Reaching 4.65%
(30-year fixed) by end of year
|
4.15%
|
Existing home
sales
|
5.4 million, 3%
growth
|
5.26 million, 6%
growth
|
Housing
starts
|
Overall 12% growth in
home starts; 15% growth in single family home starts
|
Overall 10% growth in
home starts; 7% growth in single family home starts
|
New home
sales
|
Increase 16% with
increased single family construction
|
Increase 14% with
increased single family construction
|
Home ownership
rate
|
Decreases slightly to
63.3% from forecasted 63.4% for 4Q 2015
|
63.4% for 4Q
2015
|
Economic
Indicator
|
Realtor.com® 2016
Forecast
|
2015 Expected
Actuals
|
GDP
|
2.5% increase in GDP,
uptick in growth
|
2.1% increase,
declined from 2014's 2.4%
|
Household
income
|
2% growth
|
2.4%
growth
|
Household
formation
|
1.5 million increase,
driven by millennials
|
1.4 million
increase
|
Unemployment
rate
|
Decline to 4.8% by
year-end
|
Decline to 5% by
year-end
|
Nonfarm
employment
|
Gain of 2.5 million
jobs, an average of 208,333 per month
|
Gain of 2.52 million
jobs, average of 210,000 per month
|
For more realtor.com data and trend information, please visit:
http://www.realtor.com/data-portal/realestatestatistics/.
About Move, Inc. and realtor.com®
Move, Inc. operates the realtor.com® website and mobile
experiences, which provide buyers, sellers and renters of homes
with the information, tools and professional expertise they need to
discover and create their perfect home. News Corp [NASDAQ: NWS,
NWSA] [ASX: NWS, NWSLV] acquired Move in November 2014, and realtor.com® quickly
established itself as the fastest growing online real estate
service provider in the first half of 2015 as measured by
comScore.
As the official website of the National Association of
REALTORS®, consumers know they can look to realtor.com® for the
most comprehensive and accurate information anytime,
anywhere. With relationships with more than 800 multiple
listing services (MLS), realtor.com® has more than 3 million
for-sale listings, which account for more than 97 percent of all
MLS-listed for-sale properties. More than 90 percent of the
listings are updated every 15 minutes. Move's network of websites
provides consumers a wealth of innovative tools, including
Doorsteps®, Moving.com™, SeniorHousingNetSM and
others. Move supports real estate professionals by providing many
services to grow their businesses in an increasing digital,
on-demand world, including ListHub™, the nation's leading listing
syndicator and centralized intelligence platform for the real
estate industry; TigerLead®; Top Producer® Systems; and
FiveStreetSM and Reesio as well as many free
services.
Forward-Looking Statements
This document contains certain "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act
of 1995. These statements are based on management's views and
assumptions regarding future events and business performance as of
the time the statements are made. Actual results may differ
materially from these expectations due to changes in global
economic, business, competitive market and regulatory and other
factors. More detailed information about these and other factors
that could affect future results is contained in News Corp's
filings with the Securities and Exchange Commission. The
"forward-looking statements" included in this document are made
only as of the date of this document and we do not have any
obligation to publicly update any "forward-looking statements" to
reflect subsequent events or circumstances, except as required by
law.
Media Contact: Lexie
Puckett, realtor.com, 805-557-3151
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/realtorcom-2016-housing-forecast-predicts-healthy-market-with-new-construction-driving-highest-level-of-home-sales-since-2006-300186709.html
SOURCE realtor.com