Housing market to continue upwards, face challenges in 2016
With the year-end fast approaching analysts are looking ahead to 2016’s housing market activity. The National Association of Home Builders has reported an optimistic outlook for next year but tinged with a hint of caution over a number of challenges ahead. Generally it sees an upward trend for the market nationally especially if the jobs market improves. However its economists note that growth in the labor market is tending to be in lower paid service industries rather than manufacturing; affording a mortgage may be an issue as prices continue to rise faster than wages.
Ironically the housing market’s biggest challenge from a building perspective is shortage and cost of labor, as well as rising costs of materials. However production of single-family units is forecast to rise by 27 per cent in 2016 to 914,000 units, following an 11 per cent rise to 647,000 in 2015. Multifamily units will see a 3 per cent decline in 2016 to 378,000 units following a 9 per cent rise this year to 354,000 units.
FRM mortgages edge lower
Mortgage rates were lower on average during the week to Oct. 22. The Freddie Mac Primary Mortgage Survey shows that 30-year FRM’s averaged 3.79 per cent, down from 3.82 per cent a week earlier; 15-year FRM’s averaged 2.98 per cent, down from 3.03 per cent; 5-year ARM’s averaged 2.89, slightly up from 2.88 per cent; and 1-year FRM’s averaged 2.62 per cent, up from 2.54 per cent.
Illinois realtors report strong September
The Illinois Association of Realtors has reported a strong month in terms of sales volume and prices for September. Statewide home sales (including single-family homes and condominiums) totaled 13,794 homes sold, up 5.6 per cent from September 2014 and the statewide median price rose to $172,000, a 6.2 per cent gain over September 2014.
“The fall housing market has shown little sign that there’s any significant weakening in demand,” said Mike Drews, GRI, President of the Illinois Association of REALTORS and broker-associate with Charles B. Doss & Co. in Aurora. “While we always see a seasonal slowdown this year, this month’s numbers were quite strong, and indeed were the best sales numbers for September in a decade.”
Inventory fell 10 per cent year-over-year to a tight 70,547 while homes were taking 64 days to sell compared to 69 a year earlier.