In 2015, the housing market reached its best year in nearly a decade, but 2016 will likely see a slowdown in many housing markets across the country. Home sales are forecasted to increase this year, but at a more moderate pace, “as pent-up demand combats affordability pressures and meager economic growth,” says Lawrence Yun, chief economist for the National Association of REALTORS®.
Yun says pent-up demand, sustained job growth, and improving inventory conditions will be the main triggers pushing the expected gains in new and existing-home sales in 2016.
However, Yun cites rising mortgage rates, home prices that still outpace wage growth, and a fragile global economy as the main challenges that could hold back a stronger pace of sales this year.
Watch the video below for more from Yun’s forecast.