8 Predictions for the Mortgage and Real Estate Industries in 2015

A NEW YEAR brings new opportunities, and 2015 will be no different, especially if you are a homeowner —or aspiring to become one— and these eight predictions for the mortgage and real estate industries come true… Drum roll please?

  1. Mortgage interest rates will hold steady at crazy low levels. In spite of the fact that the Federal Reserve will likely raise short term rates (which will increase ARM rates), long term rates will stay low driven by low inflation (thanks to falling energy prices) and slowing global growth.
  2. Refinancing activity will pick up. It’s true that many homeowners have refinanced already, but many have not due to credit issues or insufficient income and/or equity. Also, borrowers still paying that pesky PMI every month? Now is a great opportunity to drop it.
  3. Cash-out refinancing activity will increase. With property values finally increasing, more homeowners will be able to fund those remodel projects they’ve been putting off, like room additions, kitchen and bath upgrades, or building an outdoor living area.
  4. Real Estate Investors will focus more on liquidating. Remember the private equity groups that flocked into Atlanta after the financial meltdown and bought foreclosures by the thousands? Their plan was to hold these properties as rentals for 3-5 years and then sell…which puts us squarely in the “sweet spot” of their ultimate goal. As a result…
  5. Housing inventory will increase. Many homeowners have finally recovered enough value in their home that they can sell thereby creating more supply, while simultaneously building more demand for a new house that is larger, or has a shorter commute, or is located in a better school district. “What goes around comes around” is especially true in a thriving real estate market.
  6. FHA fees will be reduced. Many home buyers rely on low down-payment FHA loans to buy their first homes; but with FHA struggling to maintain its finances, fees were increased rather dramatically during the dark days of 2010-2012. With loans on more solid footing now, many Congressmen are demanding a fee reduction to make it more affordable for first-time homebuyers to purchase a new home.
  7. More renters will become first-time home buyers simply because landlords have raised rents to the point that buying has begun to make more sense. Also, investor groups exiting the real estate market will reduce the likelihood that first-time home buyers will be forced to compete against cash buyers when making an offer on a new home simultaneously raising the likelihood they will be able to buy the home of their dreams.
  8. Boomerang buyers will re-enter the housing market. Many homeowners lost their homes due to short sales or foreclosures in the past seven years, so they are now past the waiting periods needed to qualify for a new mortgage. As a result, their expected return to the housing market will increase housing demand thereby boosting sales.

Click HERE to see Atlanta’s Mortgage Rates!

While no one can accurately predict exactly what will happen in the future, the odds are definitely stacked in favor of a strong real estate market in 2015! 

And as always, feel free to call us anytime with any questions regarding the current Atlanta real estate market! 678-483-3300