Home sales expected to rise this year

Existing home sales are forecasted to rise about seven percent in 2015.

Thanks to an improving economy, steady job gains and an increase in home prices, National Association of Realtors® Chief Economist Lawrence Yun predicts the sales increase in a recently released video on his 2015 housing market expectations.

Yun discussed his expectations for the U.S. economy and housing market for this year. He suggests the growing economy, continued growth in the labor market and rising home prices as his reasons for an expected increase from 2014 in new and existing-home sales (view info graphic). He believes newly-constructed homes could see an increase of 30 to 40 percent, but noted that this would be a delayed increase, as these prices have been struggling in recent years.

“Home prices have risen for the past three years cumulatively about 25 percent, which boosts confidence in the market and traditionally gives current homeowners the ability to use their equity buildup as a downpayment towards their next home purchase,” said Yun.

Yun also noted that mortgage rates are historically low as of late. He credits this change with potentially propelling a rise in first-time buyers.

Despite his forecasted increase in sales, Yun cites anticipated rise in interest rates, lenders being slow to ease underwriting standards back to normalized levels, and homeowners unwilling to move because they are comfortable with their current low interest rate as potential speedbumps that could slow the increased pace of sales this year.