According to a recent Bloomberg article, more and more first-time home buyers are entering the market because they feel more confident about the economic recovery. We can certainly attest in the Plymouth-Canton Michigan real estate markets that the recovery is real. More and more homes are selling in record time and inventory is low!
Faster economic growth and a labor market that’s approaching “full employment” (according to the Federal Reserve) are aiding in that rise in confidence among first-time home buyers.
Even if you’re not a first-time home buyer, this news is sure to benefit anyone who is navigating the national housing market right now.
Fannie Mae Economist Makes Positive Predictions for 2015
Douglas Duncan, a chief economist at Fannie Mae in Washington, made the following predictions about the year ahead:
- There will be a 6.3 percent increase in mortgage lending for purchases this year.
- This increase follows a 9.6 percent decrease in 2014.
- Increasing confidence in the job market is the strongest indication that home sales will improve.
Thomas Reuters Consumer Sentiment Poll Reflects Similar Optimism
Recently Thomas Reuters partnered with the University of Michigan for a consumer sentiment poll and this is what they found:
- Consumers expect an increase of 1.7 percent in their incomes in 2015, the highest since 2008.
- Those under 45 years old expect the biggest gain at 4.7 percent.
More Encouraging Factors From The National Economy
Meanwhile, economic growth (bolstered by consumer spending as well as business investment) is increasing. In fact, the Commerce Department reported that the US grew by 5 percent in the third quarter, which is the fastest since 2003.
The Fed said it expects the economy will expand between 2.6 percent and 3 percent in 2015, up from 2.3 percent to 2.4 percent in 2014.
Plus, the economy added more than 2.7 million jobs in 2014, which is the most since 1999, according to the Bureau of Labor Statistics.
And the jobless rate will average 5.2 to 5.3 percent, which is at the level last seen before the financial crisis.
All of this job growth and creation means that the median household income in 2014 increased 1.6 percent to $53,880 through November. Experts say that rate should increase through 2015.
Which Brings Us Back to the First-Time Home Buyer
All of this growth and prosperity is driving young home buyers to the market. As they enter the market, more homes will change ownership, freeing up existing home owners to buy bigger and better homes.
We’ve said it before and we’ll say it again: You need a regular stream of first-time home buyers to aid in the growth of any housing market. Thus, we’re thrilled that more and more first-time home buyers are coming back to the market.
Your #1 Resource for Real Estate News
We hope you found today’s news on first-time home buyers as encouraging as we did!
Check back here regularly for more valuable information on the current state of the housing market and how it may impact you as a buyer or seller. We make sure our blog has new material for you every week!
And, we hope you will join us for a special seminar geared towards the real estate needs of empty nesters and growing families coming in early March. We’ll gather for cocktails and appetizers, as well as to give you the information you need as you transition to a new period of your homeownership life! Stay tuned!
Till next time,
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