LOS ANGELES (Jan 6.) - According to the California Association of Realtors for the 2015 forecast, we will see more home purchases over the next year, but with the prices flattening out at just under 15% below the 2008 peak.Stricter underwriting guidelines and an increase in self-employment have made it harder for most buyers to qualify to purchase a home. This is forcing many buyers to continue to wait to save money for a higher down payment. A higher down down payment puts buyers in a better financial position to make a home purchase. Many people have already been in this waiting period. Also it is now going on four years since many people filed for bankruptcy and they are now ready to qualify for a new purchase even with the bankruptcy on their record.
According to the report "The average for 30-year fixed mortgage interest rates will rise only slightly to 4.5 percent but will still remain at historically low levels."
The California median home price is forecast to increase 5.2 percent to $478,700 in 2015, following a projected 11.8 percent increase in 2014 to $455,000. This is the slowest rate of price appreciation in four years."
"With the U.S. economy expected to grow more robustly than it has in the past five years and housing inventory continuing to improve, California housing sales and prices will see a modest upward trend in 2015," said C.A.R. Vice President and Chief Economist Leslie Appleton-Young. "While the Fed will likely end its quantitative easing program by the end of this year, it has had minimal impact on interest rates, which should only inch up slightly and remain low throughout 2015. This should help moderate the decline in housing affordability we saw occur over the past two years."
"Additionally, the state will continue to see a bifurcated market, with the San Francisco Bay Area outperforming other regions, thanks to a more vigorous job market and tighter housing supply."