REAL ESTATE NEWS...Forecast Predicts Healthy Market with New Construction Driving Highest Level of Home Sales Since 2006

Millennials, Gen X'ers and retirees will account for majority of 6 million homes sold in 2016

Dec 1, 2015

SAN JOSE, Calif., Dec. 2, 2015 /PRNewswire/ -- New home construction and moderate gains in the existing home market will deliver the necessary one-two punch to push total home sales to the highest levels since 2006, according to the 2016 housing forecast issued today by realtor.com®, a leading destination of online real estate services operated by News Corp [NASDAQ: NWS, NWSA] [ASX: NWS, NWSLV] subsidiary Move, Inc. The forecast also identifies the top 10 markets for growth, as well as expectations for home prices and sales, interest rates and new home sales and starts.

2016 national housing outlook The 2016 housing market is expected to be a picture of moderate, but solid growth as acceleration in existing home sales and prices both slow to 3 percent year over year due to higher mortgage rates, continuing tight credit standards, and lower affordability. The new construction market will see more significant gains in the coming year as new home starts increase 12 percent year over year and new home sales grow 16 percent year over year. Total sales for existing and new homes will reach 6 million for the first time since 2006, a result of a strong gross domestic product increase of 2.5 percent and continued job creation. These healthy economic indicators will be tempered by lack of access to credit and rising home prices, which will ultimately limit housing demand and growth. [See table 1 for full forecast.]

"Next year's moderate gains in existing prices and sales, versus the accelerated growth we've seen in previous years, indicate that we are entering a normal, but healthy housing market," said Jonathan Smoke, chief economist for realtor.com®. "The improvements we've seen over the last few years have enabled a recovery in the existing home market, but we still need to make up ground in new construction, which we could begin to see in 2016. New home sales and starts will bring overall sales to levels we have not seen since 2006 and will help set the stage for a healthy new home market."  

Who are the 2016 home buyers?Next year's standout year in total sales will be driven by three distinct segments of home buyers – older millennials (25-34 years old), younger gen X'ers (35-44 years old), and retirees (65-74 years old), according to Smoke.

Millennials: They are expected make up the largest demographic of home buyers in 2016, having represented 30 percent of the existing home market. Driven by increasing income, millennials will seek out homes that meet the needs of their growing families – putting the most weight on the safety of the neighborhood and the quality of the home. Commute time and a preference for older homes have these buyers looking in city-centers and closer-in suburbs. According to realtor.com®'s proprietary research, the following markets are expected to be some of the most sought out markets for millennial home buyers in 2016 due to their large numbers of millennials, strong employment growth, and relative affordability.

1.    Atlanta-Sandy Springs-Roswell, Ga.

2.    Pittsburgh

3.    Memphis, Tenn.-Miss.-Ark.

4.    Boston-Cambridge-Newton, Mass.-N.H.

5.    Austin-Round Rock, Texas

Young gen X'ers: Accounting for 20 percent of home purchases in 2015, buyers between the ages of 35-44 will be back in the market again likely making up the second largest population of buyers in 2016. These buyers have rebounded from the financial crisis and are entering their prime family-raising and earning years. More than two-thirds of the buyers in this age group already own a home. They will be moving out of a starter home into a larger home or more desirable neighborhood. All the markets on this list are seeing an uptick in growing families, declining unemployment and growing household incomes.

1.    Atlanta-Sandy Springs-Roswell, Ga.

2.    Denver-Aurora-Lakewood, Colo.

3.    St. Louis, Mo-Ill.

4.    Charlotte-Concord-Gastonia, N.C.-S.C.

5.    Columbus, Ohio

Individuals or couples looking to relocate or retire: This group is expected to make up the third largest home buying segment in 2016. Ages 65-74, they will be selling their current home in an effort to downsize and lower their cost of living. Last year, they represented 14 percent of home buyers. They will likely put their home up for sale at the start of the home-buying season in March or April, and aim to make a home purchase following the sale of their home. This age cohort has a very strong preference for newly constructed homes and put the most weight on their ability to customize their home. Homes in the following markets are expected to see the most retiree buying activity in 2016 due to a large share of population as well as rapidly rising home values.

1.    Boston-Cambridge-Newton, Mass.-N.H.

2.    Sacramento--Roseville--Arden-Arcade, Calif

3.    San Diego-Carlsbad, Calif.

4.    North Port-Sarasota-Bradenton, Fla.

5.    Cape Coral-Fort Myers, Fla.

Top 10 growth markets and other winnersAccording to Smoke, several markets are poised for substantial growth in prices and sales. Each market demonstrates strong demand dynamics, evidenced by 60 percent more listing page views on realtor.com® than the U.S. overall and inventory that moves 16 days faster than the U.S. average. Surging demand in each market can be attributed to growing household formation, a prosperous job market, and low unemployment rates as well as large populations of millennials, young gen-X'ers and retirees. Realtor.com®'s 10 hottest markets for 2016 are:

1.       Providence-Warwick, RI-Mass.	6.     New Orleans-Metairie, La.
2.       St. Louis, Mo.-Ill.	7.     Memphis, Tenn.-Miss.-Ark.
3.       San Diego-Carlsbad, Calif.	8.     Charlotte-Concord-Gastonia, N.C.-S.C.
4.       Sacramento--Roseville--Arden-Arcade, Calif.	9.     Virginia Beach-Norfolk-Newport News, Va.-N.C.
5.       Atlanta-Sandy Springs-Roswell, Ga.	10.    Boston-Cambridge-Newton, Mass.-N.H.

Table 1: Realtor.com® Forecast for Key Housing and Economic Indicators

Housing Indicator	Realtor.com® 2016 Forecast	2015 Expected Actuals
Home price appreciation	3% increase	6% increase
Mortgage rate	Reaching 4.65% (30-year fixed) by end of year	4.15%
Existing home sales	5.4 million, 3% growth	5.26 million, 6% growth
Housing starts	Overall 12% growth in home starts; 15% growth in single family home starts	Overall 10% growth in home starts; 7% growth in single family home starts
New home sales	Increase 16% with increased single family construction	Increase 14% with increased single family construction
Home ownership rate	Decreases slightly to 63.3% from forecasted 63.4% for 4Q 2015	63.4% for 4Q 2015

Economic Indicator	Realtor.com® 2016 Forecast	2015 Expected Actuals
GDP	2.5% increase in GDP, uptick in growth	2.1% increase, declined from 2014's 2.4%
Household income	2% growth	2.4% growth
Household formation	1.5 million increase, driven by millennials	1.4 million increase
Unemployment rate	Decline to 4.8% by year-end	Decline to 5% by year-end
Nonfarm employment	Gain of 2.5 million jobs, an average of 208,333 per month	Gain of 2.52 million jobs,  average of 210,000 per month

REAL ESTATE NEWS...Pending Home Sales Nudge Forward in October

WASHINGTON (November 30, 2015) — Pending home sales were mostly unchanged in October, but shifted marginally higher after two straight months of declines, according to the National Association of Realtors®. Gains in the Northeast and West were offset by declines in the Midwest and South.

The Pending Home Sales Index,* a forward-looking indicator based on contract signings, inched 0.2 percent to 107.7 in October from an upwardly revised 107.5 in September and is now 3.9 percent above October 2014 (103.7). The index has increased year-over-year for 14 consecutive months.

Lawrence Yun, NAR chief economist, says pending sales have plateaued this fall as buyers struggle to overcome a scant number of available homes for sale and prices that are rising too fast in some markets. "Contract signings in October made the most strides in the Northeast, which hasn't seen much of the drastic price appreciation¹ and supply constraints that are occurring in other parts of the country," he said. "In the most competitive metro areas – particularly those in the South and West – affordability concerns remain heightened as low inventory continues to drive up prices."   

According to Yun, although contract activity has slightly trended downward since the spring, the ongoing strengthening of several local job markets continues to fuel the improved demand for buying that has now pushed existing-sales above a 5 million sales pace for eight consecutive months.

"Areas that are heavily reliant on oil-related jobs are the exception and have already started to see some softness in sales because of declining energy prices," adds Yun.

Yun presented his 2016 economic outlook and housing forecast earlier this month at the 2015 REALTORS® Conference & Expo in San Diego. With demand expected to remain stable through the final two months of the year, he forecasts existing-home sales to finish 2015 at a pace of 5.30 million – the highest since 2006.

Although further expansion in existing-sales is expected next year, ongoing inventory shortages and affordability pressures from rising prices and mortgage rates will likely temper sales growth to around 3 percent (5.45 million) in 2016. Home prices are expected to slightly moderate from a 6 percent increase in 2015 to 5 percent next year.

"Unless sizeable supply gains occur for new and existing homes, prices and rents will continue to exceed wages into next year and hamstring a large pool of potential buyers trying to buy a home," says Yun.

The PHSI in the Northeast rose 4.5 percent to 93.6 in October, and is now 6.8 percent above a year ago. In the Midwest the index declined 1.0 percent to 103.9 in October, but remains 3.3 percent above October 2014. 

Pending home sales in the South decreased 1.7 percent to an index of 118.1 in October and are now 0.3 percent below last October. The index in the West climbed 1.7 percent in October to 106.2, and is 10.4 percent above a year ago.

The National Association of Realtors®, "The Voice for Real Estate," is America's largest trade association, representing 1 million members involved in all aspects of the residential and commercial real estate industries.

The median home price in the Northeast in October was $248,900, up only 1.3 percent from a year ago. The other three major regions had price gains higher than 5 percent.

*The Pending Home Sales Index is a leading indicator for the housing sector, based on pending sales of existing homes. A sale is listed as pending when the contract has been signed but the transaction has not closed, though the sale usually is finalized within one or two months of signing.

The index is based on a large national sample, typically representing about 20 percent of transactions for existing-home sales. In developing the model for the index, it was demonstrated that the level of monthly sales-contract activity parallels the level of closed existing-home sales in the following two months.

An index of 100 is equal to the average level of contract activity during 2001, which was the first year to be examined. By coincidence, the volume of existing-home sales in 2001 fell within the range of 5.0 to 5.5 million, which is considered normal for the current U.S. population.

REAL ESTATE TOPICS...House-Hunting for the Holidays: Do's and Don'ts for Homebuyers

When I bought my first house, I began looking in December. In Toledo, Ohio. It was a snowy winter, and a visit to a prospective house typically went like this:

1. Find the neighborhood.

2. Get there early so I could pilfer a street-parking space that had been cleared of snow.

3. Extract the baby from the car seat.

4. Carry him in one arm as I traversed icy steps and driveways, while imagining heroic scenarios in which I fell and fractured my skull, all while holding my baby boy in a way that left him unscathed.

5. Remove my shoes in a mudroom or hallway.

6. Tour the house.

7. Reverse the previous steps.

Why did I house-hunt in the snowy north during the holiday season? For one thing, because my wife and I had a baby and we lived in a one-bedroom apartment and we wanted more space sooner rather than later. For another, because we figured that there weren't many homebuyers at that time of year, so we would gain our real estate agent's full attention.

And most crucially: My wife and I believed that anyone selling a house at that time of year had to be desperate. We're ruthless enough to exploit a home seller's urgency.

As Boston real estate agent Tim Deihl told Bankrate's Marcie Geffner: "A seller who's looking to move a piece of real estate during the holidays is a seller who needs to sell, because nobody in their right mind would pick that as the most convenient time to list their property."

Now, it's not really true that holiday home sellers are literally out of their minds. People can't always control the timing of their moves. But you really do have to be eager to sell when you have a house on the market in Toledo in December.

And you have to be a little crazy to brave the elements to look for a house. Most sellers were grateful for our interest in their homes. (And their agents were thankful that we took care not to track slush and mud in their clients' homes.)

Here's a tactic for holiday-season home shoppers: Call agents who do a lot of work in the neighborhood you're interested in, and ask them about homes that aren't listed yet, but are being prepared for sale. You might get an early look at a house that's set to go on the market in April or May.

Other tips for holiday homebuyers:

-- Sellers might be motivated, but don't expect them to accept lowball offers.

-- If snow covers the landscaping, ask for photos of the property that were taken when the place was snow-free. You don't want to be surprised by ghastly landscaping after the snow melts.

-- Don't be surprised when real estate agents, sellers, inspectors and appraisers have holiday-related things to do. There will be scheduling conflicts; be flexible.

-- Don't apologize for "intruding" on home sellers who are also celebrating holidays. They want to sell. If you end up buying, you'll make them happy, even if your visit was inconvenient.

The selection wasn't the greatest; we would have had a broader assortment of choices in the summer. But we had a baby who was about to learn to crawl, and the one-bedroom apartment was getting awfully cramped.

Plus, we were lucky because of my schedule: I worked nights that winter. It was important for at least one of us to see houses in daylight, and I was free to view houses during the brief daytime.

We eventually found our home one sunny January weekend as we drove through our target neighborhood and stumbled across an open house. Hardly anyone finds their home by visiting an open house, but we did.

Although we discovered our home after the holidays, we learned a lot when we were looking at houses during the holiday season. Specifically, we learned what we didn't want, and what to watch out for: cold drafts, no place to store wet coats and boots, weak lighting and exterior doorways without awnings or porch roofs.

By the way, I never fell with the baby in my arms, heroically or not.

Holden Lewis edits articles about mortgages and real estate for Bankrate.com. He has won numerous awards for writing about real estate and mortgages, and is a past president of the National Association of Real Estate Editors.

REAL ESTATE TOPICS...2016 home sales to be best since 2006: Realtor.com

By Tom DiChristopher 

Total homes sales next year are expected to reach the highest levels since 2006 on the back of new construction and the existing housing market, realtor.com reported Wednesday.

The report contains several surprises. Among them, Providence, Rhode Island, ranked as the hottest market for 2016, and millennials are expected to make up the biggest demographic of homebuyers next year.

Sales of existing and new home sales are expected to reach 6 million for the first time since 2006. The pace of growth of existing home sales and prices is expected to slow to 3 percent but remain strong overall. Meanwhile, new home sales are seen increasing 16 percent.

Realtor.com anticipates new home starts will increase by 12 percent.

Importantly, those new homes are becoming more affordable, realtor.com Chief Economist Jonathan Smoke said Wednesday.

"What you've seen in the last couple of years is that builders have been avoiding that more affordable entry-level price point," he told CNBC's"Squawk Box."

"We're already seeing movement. Last week's report on new home sales showed that the median new home price is finally coming down, and that's a good sign that builders are positioning communities and product for a more affordable price."

That is helping to draw in millennials, who are often viewed as absent from the housing market.

Americans ages 24 to 35 accounted for 30 percent of the existing home sales market in 2015, according to National Association of Realtors data cited by Smoke.

"That's higher than it has been the last couple of years and trending towards normal, which is more around 36, 37 percent," he said.

Smoke noted that realtor.com's top 10 hottest housing markets for 2016 contained other surprises, in addition to top-ranked Providence: St. Louis; New Orleans and Virginia Beach, Virginia.

While all the areas on the list have strong economies or improving prospects, those four areas are about four years behind other markets in the recovery, and their economic outlook for 2016 is particularly strong, Smoke said.

Realtor.com hottest markets for 2016:

1. Providence, R.I., and Warwick, Mass.
2. St. Louis
3. San Diego-Carlsbad
4. Sacramento-Roseville-Arden-Arcade, Calif.
5. Atlanta-Sandy Springs-Roswell
6. New Orleans-Metairie
7. Memphis, Tenn.
8. Charlotte-Concord-Gastonia, N.C.
9. Virginia Beach-Norfolk-Newport News, Va.
10. Boston-Cambridge-Newton

TALKING POINTS …

• Pending home sales barely moved in October as the housing market starts to flatline in the fall, according to the most recent report from the National Association of REALTORS®.

• The index, a forward-looking indicator based on contract signings, has now increased year over year for 14 consecutive months. In fact, October’s pending sales were 3.9 percent above October 2014.

• Despite rising prices and tight inventories in the West, the region posted a 1.7 percent uptick in October and is 10.4 percent above a year ago.

REAL ESTATE TOPICS...What Americans Spent More on Last Year: Housing, Health Care

North Dakota posted the biggest rise in spending on housing and utilities, at 8%. The state economy boomed in recent years amid a revolution in oilfield technology. But persistently low crude prices have spurred layoffs and a curtailed investment this year.

 

ANDREW BURTON/GETTY IMAGES

Consumer spending grew broadly but unevenly across the U.S. last year, driven largely by housing and utilities, health care, and other services.

A new Commerce Department report out Tuesday showed personal-consumption expenditures ranged from a robust 7.4% increase in North Dakota to a more muted 2.1% rise in West Virginia. Nationwide, spending was up 4.2% last year versus 3.1% in 2013.

The data only partially captures a big drop in oil prices–it shows spending on gasoline down across the country but likely wouldn’t reflect layoffs and a slowdown in investment across the energy sector, which didn’t fully materialize until this year.

But the figures help confirm the uneasy sense that outlays on essentials–such as housing–are at least partly squeezing out some discretionary spending. The Commerce Department said housing and utilities and health care accounted for almost one-third of the rise in consumer spending nationwide in 2014.

Consumer spending has been particularly muted in recent months, a potential weight on economic growth. Personal consumption accounts for about two-thirds of economic output.

Those are also areas with relatively strong inflation. At the end of 2014, the consumer-price index was up 3% from a year earlier for medical care and 2.5% for housing while overall inflation had climbed only 0.8%.

Across all states, spending on housing and utilities grew 4.1% in 2014, with North Dakota posting the biggest rise at 8%. The state economy boomed in recent years amid a revolution in oilfield technology. But persistently low crude prices have spurred layoffs and a curtailed investment this year.

After North Dakota, Colorado and Texas saw the biggest rises in overall consumer spending. After West Virginia, Missouri and Kentucky has the slowest growth.

The Commerce Department report is meant to help understand trends in regional economies.

REAL ESTATE NEWS...Lack of Affordable Options Will Drive First-Time Buyers Out to the Suburbs in 2016

SEATTLE, Nov. 30, 2015 /PRNewswire/ -- Deteriorating housing affordability will drive 2016 housing trends. A lack of affordable homes near city centers will push new and first-time homebuyers to suburbs that feel like walkable, amenity-rich mini-cities. Rising rents will force more young renters to wait longer before buying a home. And the looming threat of rising mortgage interest rates will slowly erode some of the terrific mortgage affordability the market has enjoyed for the past few years.

Zillow's 2016 Housing Market Predictions

1. The median age of first-time buyers will reach new highs in 2016 as millennials put off homeownership and other major life decisions.
2. Growth in home values will outpace incomes, especially for low-income Americans. In 2016, those whose incomes fall in the bottom third of all incomes will be priced out of homeownership and unable to afford even the least expensive homes on the market.
3. Rising rents won't let up in 2016, and will continue to set new records. The next year will bring the least affordable median rents ever.
4. As affordable housing close to city centers grows increasingly scarce, people will move farther out. Dense, walkable suburbs with an urban feel – especially those that offer good access to the city – will be 2016's new hot spots.
5. The median expectation of more than 100 economic and housing experts surveyed in the latest Zillow® Home Price Expectations Survey1 was for home values to grow about 3.5 percent in 2016. 

Statement from Zillow Chief Economist Dr. Svenja Gudell:

"Rents will continue to increase at a brisk rate in 2016, but many potential first-time buyers are living in hot markets where buying a home is really expensive. In 2016, we'll start to see more people in hot coastal markets forced to move farther from the core of the city to find housing. When they get there, they'll be looking for amenity-rich suburbs – mini-cities, with walkable cores and an urban feel.

"As renters gradually transition into homeowners, the historically low homeownership rate should stop falling quite as quickly as it has been. However, the median age of first-time homebuyers – already the highest it has ever been at about 33 – will climb higher. Millennials want to buy, but they are waiting longer than previous generations.

"All of this will happen against a backdrop of slowly increasing interest rates. That will make some homeowners think twice about selling, and many of them will decide to remodel their current homes instead."

REAL ESTATE NEWS...2016 Housing Forecast Predicts Healthy Market with New Construction

Millennials, Gen X'ers and retirees will account for majority of 6 million homes sold in 2016

Dec 1, 2015

SAN JOSE, Calif., Dec. 2, 2015 /PRNewswire/ -- New home construction and moderate gains in the existing home market will deliver the necessary one-two punch to push total home sales to the highest levels since 2006, according to the 2016 housing forecast issued today by realtor.com®, a leading destination of online real estate services operated by News Corp [NASDAQ: NWS, NWSA] [ASX: NWS, NWSLV] subsidiary Move, Inc. The forecast also identifies the top 10 markets for growth, as well as expectations for home prices and sales, interest rates and new home sales and starts.

2016 national housing outlook The 2016 housing market is expected to be a picture of moderate, but solid growth as acceleration in existing home sales and prices both slow to 3 percent year over year due to higher mortgage rates, continuing tight credit standards, and lower affordability. The new construction market will see more significant gains in the coming year as new home starts increase 12 percent year over year and new home sales grow 16 percent year over year. Total sales for existing and new homes will reach 6 million for the first time since 2006, a result of a strong gross domestic product increase of 2.5 percent and continued job creation. These healthy economic indicators will be tempered by lack of access to credit and rising home prices, which will ultimately limit housing demand and growth. [See table 1 for full forecast.]

"Next year's moderate gains in existing prices and sales, versus the accelerated growth we've seen in previous years, indicate that we are entering a normal, but healthy housing market," said Jonathan Smoke, chief economist for realtor.com®. "The improvements we've seen over the last few years have enabled a recovery in the existing home market, but we still need to make up ground in new construction, which we could begin to see in 2016. New home sales and starts will bring overall sales to levels we have not seen since 2006 and will help set the stage for a healthy new home market."  

Who are the 2016 home buyers?Next year's standout year in total sales will be driven by three distinct segments of home buyers – older millennials (25-34 years old), younger gen X'ers (35-44 years old), and retirees (65-74 years old), according to Smoke.

Millennials: They are expected make up the largest demographic of home buyers in 2016, having represented 30 percent of the existing home market. Driven by increasing income, millennials will seek out homes that meet the needs of their growing families – putting the most weight on the safety of the neighborhood and the quality of the home. Commute time and a preference for older homes have these buyers looking in city-centers and closer-in suburbs. According to realtor.com®'s proprietary research, the following markets are expected to be some of the most sought out markets for millennial home buyers in 2016 due to their large numbers of millennials, strong employment growth, and relative affordability.

1.    Atlanta-Sandy Springs-Roswell, Ga.

2.    Pittsburgh

3.    Memphis, Tenn.-Miss.-Ark.

4.    Boston-Cambridge-Newton, Mass.-N.H.

5.    Austin-Round Rock, Texas

Young gen X'ers: Accounting for 20 percent of home purchases in 2015, buyers between the ages of 35-44 will be back in the market again likely making up the second largest population of buyers in 2016. These buyers have rebounded from the financial crisis and are entering their prime family-raising and earning years. More than two-thirds of the buyers in this age group already own a home. They will be moving out of a starter home into a larger home or more desirable neighborhood. All the markets on this list are seeing an uptick in growing families, declining unemployment and growing household incomes.

1.    Atlanta-Sandy Springs-Roswell, Ga.

2.    Denver-Aurora-Lakewood, Colo.

3.    St. Louis, Mo-Ill.

4.    Charlotte-Concord-Gastonia, N.C.-S.C.

5.    Columbus, Ohio

Individuals or couples looking to relocate or retire: This group is expected to make up the third largest home buying segment in 2016. Ages 65-74, they will be selling their current home in an effort to downsize and lower their cost of living. Last year, they represented 14 percent of home buyers. They will likely put their home up for sale at the start of the home-buying season in March or April, and aim to make a home purchase following the sale of their home. This age cohort has a very strong preference for newly constructed homes and put the most weight on their ability to customize their home. Homes in the following markets are expected to see the most retiree buying activity in 2016 due to a large share of population as well as rapidly rising home values.

1.    Boston-Cambridge-Newton, Mass.-N.H.

2.    Sacramento--Roseville--Arden-Arcade, Calif

3.    San Diego-Carlsbad, Calif.

4.    North Port-Sarasota-Bradenton, Fla.

5.    Cape Coral-Fort Myers, Fla.

Top 10 growth markets and other winnersAccording to Smoke, several markets are poised for substantial growth in prices and sales. Each market demonstrates strong demand dynamics, evidenced by 60 percent more listing page views on realtor.com® than the U.S. overall and inventory that moves 16 days faster than the U.S. average. Surging demand in each market can be attributed to growing household formation, a prosperous job market, and low unemployment rates as well as large populations of millennials, young gen-X'ers and retirees. Realtor.com®'s 10 hottest markets for 2016 are:

1.       Providence-Warwick, RI-Mass.	6.     New Orleans-Metairie, La.
2.       St. Louis, Mo.-Ill.	7.     Memphis, Tenn.-Miss.-Ark.
3.       San Diego-Carlsbad, Calif.	8.     Charlotte-Concord-Gastonia, N.C.-S.C.
4.       Sacramento--Roseville--Arden-Arcade, Calif.	9.     Virginia Beach-Norfolk-Newport News, Va.-N.C.
5.       Atlanta-Sandy Springs-Roswell, Ga.	10.    Boston-Cambridge-Newton, Mass.-N.H.

Table 1: Realtor.com® Forecast for Key Housing and Economic Indicators

Housing Indicator	Realtor.com® 2016 Forecast	2015 Expected Actuals
Home price appreciation	3% increase	6% increase
Mortgage rate	Reaching 4.65% (30-year fixed) by end of year	4.15%
Existing home sales	5.4 million, 3% growth	5.26 million, 6% growth
Housing starts	Overall 12% growth in home starts; 15% growth in single family home starts	Overall 10% growth in home starts; 7% growth in single family home starts
New home sales	Increase 16% with increased single family construction	Increase 14% with increased single family construction
Home ownership rate	Decreases slightly to 63.3% from forecasted 63.4% for 4Q 2015	63.4% for 4Q 2015

Economic Indicator	Realtor.com® 2016 Forecast	2015 Expected Actuals
GDP	2.5% increase in GDP, uptick in growth	2.1% increase, declined from 2014's 2.4%
Household income	2% growth	2.4% growth
Household formation	1.5 million increase, driven by millennials	1.4 million increase
Unemployment rate	Decline to 4.8% by year-end	Decline to 5% by year-end
Nonfarm employment	Gain of 2.5 million jobs, an average of 208,333 per month	Gain of 2.52 million jobs,  average of 210,000 per month

REAL ESTATE NEWS...5 Real Estate Trends to Watch in 2016

At the close of last year, many real estate experts predicted the U.S. Federal Reserve would raise interest rates in 2015. That prediction never came to be, but even if rates rise later this month or next year, Ralph McLaughlin, a housing economist at Trulia, doesn't think it will scare away many buyers.

If rates do increase, it could be as little as a quarter percent. McLaughlin doesn't expect that to have a big impact on the market, but it could temper home price growth, "which is good news for prospective homebuyers," he says. "Interest rates won't have much of an effect on the 'rent versus buy' math," he explains. "Buying would still be cheaper than renting in most metros around the country."

The threat of last year's rumored rate increase propelled some prospective buyers into action, but Nela Richardson, chief economist for national real estate brokerage Redfin, doesn't see that same pattern repeating itself. "Buyers now don't seem to be all that spurred or driven by a rate increase," she says. "That lack of urgency will translate into next year's housing market. There's interest, but there's not a lot of inventory to buy."

Here's a look at other real estate trends to expect heading into the new year.

1. Cooling coastal markets. Metropolitan areas on the West Coast and in the Northeast have been hot real estate markets during the past several years, but McLaughlin says some of the country's priciest housing markets are showing signs of slowing. "Particularly in places like San Francisco, San Jose, Southern California and also some places in the Northeast, we're finding that homes in those markets ... [are] starting to slow down slightly from the previous year," he says, adding that home prices in those areas may also cool.

2. Booming bargain belt. As the Northeast and West Coast cools, McLaughlin expects the "bargain belt" (metro areas in the South) to boom in the coming year. "In metros like Winston-Salem, [North Carolina], we've seen the biggest year-over-year increase in how quickly homes move off the market," he adds.

Michele Silverman Bedell, owner and CEO of Silversons, a residential real estate agency based in Westchester, New York, also sees buyers migrating south. "A lot of people are thinking about selling in the Northeast," she says. "A lot of baby boomers, and even young people, are thinking of moving south to be out of the cold." It doesn't hurt that housing is more affordable, too. Zillow reports that the median sale price for Winston-Salem was $130,150 as of Oct. 31. On the other hand, the median sale price for New York City was more than four times as much ($599,900) for that same time period.

3. Demand for amenity-rich suburbs. As some buyers get priced out of city centers, they're looking at suburban housing -- but in a different light than in the past. "People's preferences have started to change," says Svenja Gudell, Zillow's chief economist. "They're searching for amenity-rich suburbs [and] choosing this type of housing over the cul-de-sac in the suburbs." These amenities might include easy access to grocery stores, dry cleaners and other conveniences near home.

"Walkability factor is a big trend," Bedell adds. "A lot of [buyers] choose to live in areas that are close to stores, trains and highways where they can have a lot of their conveniences." She says young families often want suburbs that still offer an urban feel.

4. Older first-time buyers. Richardson predicts that some Gen Xers, especially those with growing families who haven't bought real estate in the past, will finally enter the market next year. "They've had some steady income, and they haven't been too affected by the earlier downturn in the labor market," she says. "They may have missed out on buying at the bottom, but they could be ready to buy next year."

A study of generational homebuying trends by the National Association of Realtors earlier this year found that Generation X (ages 35 to 49) made up just over a quarter of recent buyers, while millennials (those 34 and younger) made up 32 percent. As boomers age, they'll likely continue to downsize, trading McMansions for smaller, more manageable living spaces.

5. Millennials trading up. Millennials who already own condos or starter homes may be looking to trade up for more space in 2016, especially as they're combining households and starting families. Trouble is, inventory is low in many markets, as some homeowners choose to renovate their homes to fit their needs rather than sell. "People are trying to trade up," Bedell says, "but there's not much on the market currently."

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