As this holiday season comes into the New Year your team here at Newton Realty is excited about what is to come. As many of us are making resolutions to shape up at the gym, 2016 is shaping up to be another year of steady economic growth with an estimated annual increase of 2.6% to total GDP. The Federal Home Loan Mortgage Corporation showed downward trends in both FRM and ARM mortgage rates throughout 2015. However, the fed has recently begun monetary policy normalization and 2016 will see progressively higher mortgage rates. The median price of homes in California is estimated to increase from $476,300 in 2015 to $491,300 in 2016; while the housing affordability index is expected to decrease from 31% to 27% respectively. 2016 has some great market opportunities for renting millennials to turn into first time home buyers. Many baby boomers are ready to downsize as they prioritize investment and retirement. Investors are ready to sell as housing prices begin to level off. Low interest rates will be here a short while longer for everyone else.
Source: California Association of Realtors. 2016 California and Economic Market Forecast.