WASHINGTON — 2015 was the best year for housing sales in almost a decade, but if the usually upbeat National Association of Realtors’ 2016 forecast is right, this will be a much slower year for sales.
NAR cites headwinds that include rising mortgage rates, home prices that are still outpacing wage gains and a shaky global economy as reasons that will hold back sales in 2016.
It now expects an annual increase in sales of just 1 to 3 percent this year, compared to 6.5 percent in 2015, the best year for sales growth since 2006.
Despite a slowdown in sales, prices are expected to continue to rise in 2016.
“The continued rise in home prices will occur due to the fact that we will again encounter housing shortages in many markets because of the cumulative effect of homebuilders under producing for multiple years,” says NAR chief economist Lawrence Yun. “Once the spring buying season begins, we’ll begin to feel that again.”
For all of last year, existing home sales reached an estimated 5.26 million, a nine-year high, but sales were still 25 percent below the peak set in 2007.
NAR forecasts existing home prices will still rise a healthy 6 percent in 2016.
The infographic below breaks down the housing outlook and potential speed bumps along the way.
