Real Estate Trends in 2015 Favor WIN Home Inspection Franchise
Rising home sales signal growing demand for inspections
As many as 4 million home buyers paid for an inspection before purchasing houses last year, and that number is expected to be even higher in 2015 as the economy strengthens and more people pursue the American Dream of owning a home. There has never been a better time to join the WIN Home Inspection franchise.
Homes were selling at an annual pace of about 5 million or more for much of 2014. The National Association of Realtors says 99% of its members recommend an inspection, and 77% of all home buyers hire inspectors before making their purchases. As home sales increase, so does the number of inspections.
Here’s what experts are predicting for 2015:
1. Prices are stable
Home values are expected to rise by 5.7% nationally between July 2014 and July 2015. That’s about the same pace as the previous year, according to market analyst CoreLogic. That’s good news for house hunters, who will find that the home of their dreams is still within reach.
Lawrence Yun, chief economist for the National Association of Realtors, predicts prices will rise a bit less — 4% in 2015 and 2016 — which reflects a healthy level of growth that benefits both buyers and sellers.
2. Mortgages are affordable
Mortgage interest rates have been at or near historic lows, so predictions are they will go up. But they are expected to rise very slowly and stay below 5% on a 30-year loan throughout the year. Freddie Mac, the government-controlled corporation that buys and sells mortgage securities, conducts a survey of mortgage rates and also makes forecasts about the housing industry. Its long-term outlook calls for gradually rising rates over the next 12 months.
3. More buyers can qualify
Mortgage lenders toughened their loan requirements when the housing market fell. Now the Federal Reserve reports that lenders are relaxing those standards in several key areas. Lenders are allowing lower credit scores and higher levels of debt, which opens the door to home ownership for more people. That trend is expected to continue in 2015.
4. The economy is stronger
The NAR’s Yun noted positive developments in the labor market that should support increased wages. Job growth is expected to surpass 2.5 million for 2014 and again in 2015.
“The economy finally regained the 8.8 million jobs lost during the downturn, and we’re starting to see more workers showing a willingness to quit, which usually signals they’re becoming more mobile and confident they can find a higher-paying job,” he says. When those workers move, they will probably sell their existing houses and buy in their new locations, creating demand for inspections.
5. Demand is high
Yun believes pent-up demand will lead to more home sales in 2015. Existing-home sales should increase to 5.3 million in 2015 and 5.4 million in 2016.
Zillow, which tracks the housing market, says that by the end of 2015, Millennials — people younger than 35 — will overtake Gen X — those 35 to 50 — as the largest group of homebuyers. These younger Americans have been delaying getting married and having children, two key drivers of the decision to buy a home.
As they mature, Millennials are expected to become a major force in the market. Zillow reports that 42% of them want to purchase a house in the next one to five years.
6. It’s cheaper to buy than rent
Stan Humphries, chief economist at Zillow, forecasts that rents will rise faster than home prices, which could encourage more people to become buyers.
“As renters’ costs keep going up, I expect the allure of fixed mortgage payments and a more stable housing market will entice many more otherwise content renters into the housing market,” Humphries told Forbes.com.