Dive Brief:
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Realtor.com Chief Economist Jonathan Smoke told Housing Wire last week that while home prices are getting back to normal, home sales are not.
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The “equilibrium” in the housing market—stable prices and normal sales volume—will not return until it gets easier for first-time buyers to qualify for mortgages and participate in the housing market, Smoke said. He said changes in the lending process—including lowering down payments and the requirement for ultra-high credit scores—are critical to getting those buyers into the market. “Credit access is the key catalyst for early 2015,” Smoke noted.
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Home prices, which have slowly but steadily increased over the past year, have been skewed by a greater interest in luxury new homes, which come with steep price tags, Smoke said.
Dive Insight:
Smoke’s outlook for the 2015 housing market coincides with predictions from economists at the National Association of Home Builders, Moody’s Analytics, and the National Association of Realtors, who agree that even without an easing of credit restrictions—which are promised for the new year—housing demand will continue to rise.
Other factors, like job growth, better incomes, and the formation of more households in the coming year, Smoke said, could help the homebuilding industry “approach double-digit gains in transactions in 2015.”