Most housing analysts are predicting substantial growth in housing activity in 2015 — much more than has been experienced during the past year.
For example, the Wells Fargo Economics Group’s “2015 Economic Outlook,” subtitled “A whole new ball game,” predicts that the housing market will continue its recovery and gain momentum in 2015 after a disappointing 2014.
Wells Fargo cites a number of reasons in the report for its optimistic housing market predictions for next year, namely easing of credit, job and income growth, and mortgage rates nearing their lowest levels in a generation.
The economists predict existing home sales, which dropped by 3.8 percent for the first 10 months of 2014, will grow by 4.1 percent in 2015.
Strong growth predicted for single-family starts
Single-family starts — which grew by just 6 percent (655,000 units) in 2014 because of a weak job market, slow household formation, tight lending standards and a backlog of troubled mortgages going through the foreclosure process — are expected to make a comeback in 2015. Economists expect the percentage of single-family starts to more than double next year, up to 13.7 percent.
Two major factors in the turnaround in homeownership have been the former rise in foreclosures and the earlier decline in home prices, according to Wells Fargo. The homeownership rate, which peaked 10 years ago, has fallen 4.8 percentage points, down to 64.4 percent, the lowest rate for homeownership in 19 years.
“We would expect this series to overcorrect because of tight mortgage credit, changing attitudes towards homeownership and household finances continue to be repaired,” the report says.
Q: What is “universal design” as related to housing?
A: Universal design is a concept of building a home that is usable by all people, including those in a wheelchair, without the need for further adaptation in the future. It’s a concept that is growing in the industry, even in the design of factory-built homes.
Mark Brunner, spokesman for the Minnesota Manufactured Housing Association, says the versatile design trend has caught on among manufactured-home companies that want to appeal to a wider consumer base.
The average buyer of a factory-built home is 53 years old, but buyers also include young families and singles. Manufactured homes can be built on private properties or in a land-lease community with other manufactured homes.
Q: Is there an incentive program to assist homeowners who are struggling with their mortgage?
A: Treasury Secretary Jacob Lew’s decision to give more help to homeowners who have already received mortgage assistance has sparked opposition from Republicans aiming to end President Barack Obama’s foreclosure prevention program.
The Treasury Department announced that homeowners in their sixth year of payments on a modified mortgage will get a $5,000 principal reduction to help them build equity and handle possible financial trouble.
The assistance, which could total $5 billion, is part of the Home Affordable Modification Program, which began in 2009 to stem the flood of foreclosures after the housing crash.
Q: Have certain homeowner tax provision laws been extended?
A: The Senate recently passed a bill that would retroactively extend more than 50 expiring tax provisions for one year, including one that shields distressed homeowners from paying taxes on any mortgage debt forgiven in a short sale, according to National Mortgage News.
Q: How is business progressing for mortgage professionals?
A: It’s progressing nicely. Despite persistent concerns about risk and regulatory compliance, the majority of mortgage professionals agree that business conditions today are better now than they were a year ago.
According to survey results released by The Collingwood Group, 33 percent of mortgage lenders, mortgage servicers and other industry professionals believe business conditions are “a little better” than they were last year.