Home sales projected to rise 9% in 2015

Real estate market tracker CoreLogic expects significant increases in home sales and housing starts in 2015.

Home sales are projected to jump by 9 percent and CoreLogic forecasts housing starts to climb by 14 percent, according to a news release.

CoreLogic cites a strong U.S. economy featuring employment growth within the first-time homebuyer age group as a reason for the optimistic outlook. Oil prices are down about 45 percent since June, which supports a growing economy, and 25-to-29-year-olds experienced a 3 percent improvement in 2014 in employment growth – one percentage point higher than the overall employment growth rate.

The lower-end home price category is growing faster than the higher-end price category in the top 25 U.S. markets, according to CoreLogic, which reflects a tight supply and a need for new construction.

In December, mortgage rates dipped below 3.9 percent for the first time since May 2013, when rates spiked and slowed in the second half of 2013 and the first half of 2014. The 30-year fixed mortgage rate is expected to inch up to 4.3 percent from 4.2 percent in 2014. Still, the expected mortgage rate increase shouldn’t impact demand given the drop in oil prices and overall slow-to-grow home prices.

In 2015, demand for housing is expected to increase, with overall sales projected to rise to 5.8 million, up from 5.3 million in 2014. Total housing starts are expected to reach 1.1 million in 2015, up 14 percent year-over-year. This uptick is a good sign, but it is still 23 percent below the 1.45 million average seen over the last 50-plus years, CoreLogic reports.