Now that we’ve rung in 2016, we can finally take a good look at last year’s trends in the housing market. 2015 demonstrated an overall upward trajectory, which will likely continue into 2016. The housing market has all but regained its stability from before the housing market crash, and that is good news for everyone in the real estate industry. Continue reading for a more detailed description of how the housing market fared last year.
Ups & Downs
Overall, there was a net growth in the housing market. Under non-distressed conditions, sales for both new and repeat buyers were on the rise—as well as for people relocating or changing jobs. There was a measured 13% jump in sales of new homes from 2014, and a 7% rise for sales of existing homes. These marked improvements can be accredited to increased job creation and household formation. Last year a total of 1.4 million new households were established, and there were approximately 210,000 new jobs made. These upward trends facilitated strong housing sales.
Not every area of the housing market showed improvement, however; there was an observed decline in sales of distressed homes, and the number of international and second-home buyers fell off. Despite these specific setbacks, it bears repeating that on the whole the housing market is on better footing now than it was in 2014.
Another piece of good news for realtors is that home values nationwide rose between 5-7%. Home prices have almost entirely recovered from the recession, and most sellers will now be able to make a profit.
What Drove These Results?
Last year’s market was mostly driven by an increased demand for housing. Interestingly, there was a greater demand for rentable units, like apartments and condos, than for single-family homes. Construction boomed in 2015 with construction projects increasing over 20% from the year before, this resulted in 900,000 new homes. This only makes up 65% of the new households created last year, with the rest occupying a rented unit.
Far more people are looking for apartments, but supply is still relatively low. This classic supply-and-demand situation has driven rent rates through the roof. In 75% of the country, it’s actually cheaper to buy. Real estate agents should be very happy to hear this—but, of course, with so many families renting at exorbitant rates, they will have less to save for their first payment on a home.
Begin the New Year with Champion Title
While the housing market may change from year to year, you can always rely on Champion Title to offer the same great services. Our title agents can assist realtors in residential sales, refinancing homes, securing title insurance, title searches, and filing a 1031 exchange. Take a look at our homepage to read about our services, or contact us today.