Home Sales Predicted to Grow 1-3 Percent
Realtors Group States In 2016 Forecast
New and existing home sales will continue to expand in 2016, just not at the same, rapid pace as the year before, the National Association of Realtors has forecast.
The housing market experience one of its best years in 2015 in nearly a decade, said Lawrence Yun, chief economist for the NAR.
Sales should continue to remain strong in 2016, but at a more moderate, subdued pace, Yun said.
Pent-up buyer demand and sustained job growth will help drive this trend. But rising mortgage rates, accelerating home prices and shaky economies in foreign markets will offset these positives.
As a result, sales may only increase within a range of 1-3 percent.
"Furthermore, the continued rise in home prices will occur due to the fact that we will again encounter housing shortages in many markets because of the cumulative effect of homebuilders under producing for multiple years," Yun said. "Once the spring buying season begins, we'll begin to feel that again."
With December data still due to be tabulated, Yun said he expects total existing home sales to finish 2015 at about 5.26 million units, up 6.5 percent compared to 2014. If that turns out to be true, it would be highest pace since 2005.
National Association of Realtors:
Big Lift On Horizon for Construction Industry
The construction industry will receive a tremendous shot in the arm this year, thanks to the $1.1 trillion 2016 Omnibus Appropriations bill.
Because of this legislation, the federal government will substantially increase funding for many of its construction programs.
For instance, the General Services Administration's construction and acquisition account will receive $1.6 billion, triple what had been doled out to this agency in the past. About $948 million of GSA's appropriation will be used for new courthouses.
The Department of Veterans Affairs' budget will be allocated $1.2 billion, more than double its previous funding level.
The ceiling for a highway fund has been raised 5 percent to $42.4 billion; the Federal Transit Administration will get an 8 percent hike to $11.8 billion; a military fund will be allocated $7.2 billion, an increase of 16 percent; and the Army Corps of Engineers fund will go up $6 billion, a 10 percent jump.