US homes valued at $28.5 trillion at year end
The total value of America’s residential real estate hit $28.5 trillion at the end of 2015 according to analysis by Zillow. The housing market added $1.1 trillion in value, a 4.1 per cent increase on 2014. Although the growth was lower than in 2014 (6 per cent) some markets have outperformed the national average; California continues to gain with the state now accounting for a quarter of the nation’s housing value.
"Total home value growth slowed this year, but there was still a significant increase in overall value, and many markets are more valuable than they've ever been. At the same time, more renter households and rising rents combined to set new records in rental spending in 2015. Americans are spending a lot of money on housing, and that will make affordability an important issue next year,” said Dr Svenja Gudell, Zillow’s chief economist.
Americans shelled out nearly $20 billion more in rent in 2015 than in 2014 as people around the country set up 1.8 million new renter households and median monthly rents rose at a record pace.
Mortgage rates higher amid Fed rise
Average mortgage rates ended higher in the last week of 2015 amid the recent interest rate rise from the Fed. The Primary Mortgage Market Survey from Freddie Mac showed that 30-year fixed ARM’s averaged 4.01 per cent, up from 3.96 per cent in the previous week; 15-year ARM’s averaged 3.24 per cent, up from 3.22 per cent; 5-year FRM’s averaged 3.08 per cent, up from 3.06 per cent; 1-year FRM’s averaged 2.68 per cent and were unchanged.
More than a quarter plan to pay down debt
Paying down debt is a priority for more than a quarter of Americans polled by GoBankingRates.com. The survey found that 27.5 per cent made a New Year’s Resolution to reduce their debt levels with 30.1 per cent vowing to spend less and save more. More than half (57.6 per cent) are setting a money goal. While millennials are the age group most concerned with spending less and saving more money in 2016, Gen Xers are the most focused on paying down their debt.
Real estate tipped as growth business in 2016
Real estate has been highlighted as one of three growth areas for business in 2016. A Forbes article by Elaine Pofeldt, based on the latest census data (from 2013), showed that random service businesses; real estate, rental and leasing; and transportation and warehousing are all outperforming other sectors. There were 13,615 real estate, rental and leasing businesses created in Florida while Delaware saw the sector gain the most in dollar terms, rising $55.1 million to $883.7 million in receipts.