Mortgage Rates Will Hit 5 Percent in 2015 According to NAR

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Mortgage rates will rise to 5% next year and reach 6% in 2016. This prediction was made by the chief economist of the National Association of Realtors, Lawrence Yun, at this year’s Realtors Conference & Expo. The upward movement of the rates will allow them to get to their average level for the past ten years.

The increase in mortgage rates will have a negative impact on the demand for home loans. Yun explained that this effect can be offset with the expected relaxation in credit standards which is supported by the Federal Housing Finance Agency. He estimated that the opening up of the credit box could possibly lead to an increase in home sales of as much as 15%.

The National Association of Realtors predicts a decline in home sales of 3% for 2014. One of the factors behind the drop in sales on a year-over-year basis is the tight inventory in the housing market. However, Yun said that the forecast for 2015 is for an increase in home sales by 7%. Further increase is expected in 2016.

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NAR estimates that the median home price will rise by approximately 6% for the year. For the next two years, home prices are expected to increase by around 4%. Yun said that this was more or less in line with the historic growth in home values. No major variation from this trend is foreseen.

The large metropolitan areas are projected to have a higher rate in increase in home prices compared to the average for the country. According to NAR, home prices will grow with more than 5% only in three states. These are Florida, Texas and Hawaii.

The predictions of the National Association of Realtors are based on the improvement in the accessibility of mortgage credit which is expected in the coming year.

Christian

Christian

Christian Calvin mortgage Christian is a contributing writer for Mortgage.info. He is a graduate from the University of Tennessee with a degree in Communications and a concentration in Broadcasting. Christian has served as vice-president for a privately-held company for more than 20 years. Additionally, he has also applied his writing and business knowledge to various websites with a focus on business and sports news . . . both of which are passions. Christian enjoys playing golf and spending time with his family and friends.

Contact: christian@mortgage.info
Christian

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