A Different Look at the 2015 Housing Market

Everything we read says this year will be better than last year. Here’s a look at the possible, negative impacts.

While we would love to believe all the positive reports, 2015 may not be as good as 2014. Among the potential adverse impacts are:

Foreign investors and buyers may reduce their purchases due to the strengthening of the dollar and weakness in their home country economies. This may especially be true for Russian buyers and investors.

While the job market appears robust, with total jobs added in 2014 the best results in 14 years, family and household incomes remain stagnant. The percentage of working age Americans who have full-time jobs remains at nearly a 36-year low. The rise of home prices (even offset by lower mortgage rates) creates a situation where affordability becomes a larger issue.

Finally, the entire mortgage arena may remain an issue. There are two areas of concern to some forecasters. Even though Fannie and Freddie are loosening underwriting guidelines, it does not mean that mortgage lenders are going to jump

in quickly. They were badly burned in the downturn and have been battered by settlements. They are gun shy about moving too quickly.

Also, there are strong feelings that, at some point, interest rates will rise. There are also some new appraisal requirements that may put a damper on housing sales, as well. Now, when rates start to rise it tends to bring a rush of buyers into the market. That could happen here. Ultimately, it makes it more difficult to buy a home.