Five Economists Forecast the 2015 Housing Market

In January, the Housing News Report asked five leading housing economists to forecast what 2015 will bring for the U.S. housing market. Overall, the economists we interviewed — Lawrence Yun from the National Association of Realtors, Jonathan Smoke from Realtor.com, Christopher Thornberg with Beacon Economics, Mark Zandi with Moody’s Analytics and Jed Kolko with Trulia — were cautiously optimistic about 2015 when it comes to home prices, home sales, interest rates and the impact of loosening lending standards that have recently been introduced by government agencies.

Here are some excerpts of what they said for 2015:

“More buyers returning to market from improved job market conditions and a steady flow of buyers who went into the ‘penalty box’ after a distressed property sale,” said NAR’s Yun.

“The new 3 percent down payment products coming from Fannie Mae and Freddie Mac should have a positive impact on the market as they enable more first-time buyers who have good credit, but limited assets,” said Realtor.com’s Smoke.

“We expect sales and price appreciation to pick up steam this year. Existing home sales should rise over 5 million and prices will accelerate some — probably close to double digits by the end of next year,” Beacon’s Thornberg said.

“New and existing home sales are expected to increase by as much as 20 percent in 2015. Key to this optimism is continued gains in the job market.  The market should be tight enough that households will finally enjoy real wage gains,” said Zandi with Moody’s.

“The strongest source of housing demand will be young people getting jobs and forming households. But they’ll be moving into rentals and saving for a down payment rather than buying homes right away,” said Trulia’s Kolko.

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