Home Buying Predictions for 2016

HOME PRICE APPRECIATION WILL SLOW. Industry experts expect home prices to continue to rise in 2016, but at a slower pace, somewhere between 3 percent and 4.5 percent nationally. In the expensive coastal markets, like New York and San Francisco, prices had been rising much more quickly, but that trend is not sustainable, said Ralph McLaughlin, a housing economist for the real estate website Trulia.

“We are approaching a critical threshold on the costly coasts where the median household would have to spend 40 percent or more on the median-priced house,” he said. “That’s a signal that households will not rush to buy homes because affordability is pushing down on their ability to do so.”

THE SPRING MARKET COULD HIT IN WINTER. Spurred by the expected rise in interest rates, buyers may come out earlier in the year than usual, maybe even in January and February, Ms. Richardson said.

Mr. Smoke agreed that a “crazy spring market” could be in the offing. “Rates are going up, and buyers have seen prices rising and will want to get in before they go up higher,” he said. “And the third factor is, what’s the alternative? Renting is becoming increasingly expensive.”

Read More: http://www.nytimes.com/2015/12/27/realestate/home-buying-predictions-for-a-new-year.html?ref=realestate&_r=0

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