The Biggest Real Estate Industry News Stories & Trends from 2015
By Matthew Bushery
About Agent Basics
Poll all agents and brokers in the real estate industry at year’s end, and each and every one of them will likely give you their own unique list of the biggest headlines and most important stories from 2015. Some will say the bump in home sales or decline in foreclosures was the most notable takeaway from the year, while others will point to improving mortgage affordability or new federal regulations as the foremost trend they noticed during the previous 12-month period.
The truth is there wasn’t just one primary housing market news narrative in 2015, but rather many of them — 10 of which you can learn about below. (Of course, there were plenty of other interesting storylines from the year not included in this article, so be sure to share what real estate industry news most intrigued and informed you during 2015 in the comments at the end of the post!)
1) Overall Housing Market Gets Healthier, While More Foreclosures Completed
The consensus real estate industry overview for 2015 is … well … that there is no consensus for the U.S. housing market. Some pockets around the country outperformed others. Certain home types (new vs. existing, single-family vs. detached, distressed vs. non-distressed properties) fared better than others. No one demographic — Baby Boomer, Millennial, Generation Y, or otherwise — drastically altered the home buying or selling landscape.
Having said all of that, there were a couple of factors that contributed to the continued (albeit modest) real estate market growth during the year.
- For starters, foreclosures continued to be completed at a record pace, as RealtyTrac data throughout the year indicated. This led to higher home sale prices and values in numerous metros nationwide, and, in turn, appeared to aid both buyers and sellers across the U.S. — particularly the latter.
- Meanwhile, homes sales continued to trend upward, despite some bumps in the road during the 12-month period. The average total of new residential sales climbed once again, per U.S. Census Bureau data, and existing-home sales in 2015 beat year-over-year figures in several months, according to the National Association of REALTORS® (NAR).
- Even the prospect of additional foreclosures hitting the market seems to be on the decline, as the Officer of the Comptroller of the Currency reports 93.9% of all residential mortgages were current and performing well during the third quarter of 2015 — up from 93% during the same three-month period in 2014.
2) International Buyers Account for Considerable Number of U.S. Home Sales
A noticeable pattern in the last decade for the U.S. housing market is the growing prevalence of international home buyers. People from across the globe purchased homes for sale nationwide during 2015, including and especially high-end properties. Whether this trend will continue in the years ahead at this marked rate is unknown, but multiple sources and reports from the year paint a clear picture of just how significant a portion of overall property sales come from this large demographic.
- One primary factor that contributed to the relatively robust health for the 2015 real estate market was the hefty home buying activity among Chinese investors, who purchased a fair share of luxury residential properties nationwide during the year, as the New York Times explains.
- Other foreign buyers of considerable amounts of homes for sale in the U.S. during the past year include those from Canada, Mexico, India, and the United Kingdom, which, along with China, combined for slightly more than half of all international home sales in 2015, REALTORS reports.
- Despite the strong international buyer totals, however, the arrival of summer led to diminished numbers, due in part to a stronger dollar, according to the same REALTORS analysis. CoreLogic notes, “Foreign buying could continue to decline, level off, or increase in 2016 depending on the value of the U.S. dollar relative to most foreign currencies, but the uncertainties surrounding how the Eurozone will resolve the debt crisis in Greece has made it more difficult to project foreign currency movements.”
3) NAR Annual, Inman Connect Once Again Headline Real Estate Conferences
If you’re ever looking to attend some of the best regularly held real estate events around the U.S., you’d be hard-pressed to find two better ones than the the National Association of REALTORS®’ REALTORS® Conference & Expo and Inman Real Estate Connect — both of which attracted top industry pros and educated (and entertained) thousands of agents and brokers worldwide.
- The San Francisco edition of Inman Connect afforded agents the chance to meet and greet with up-and-coming and established industry brands, as well as learn about the latest in marketing, sales, tech, and other facets of the field. More than a few marketing insights were shared by the likes of “Million Dollar Listing”’s Andrew Greenwell and Roh Habibi and Douglas Elliman’s Dottie Herman.
- Just a few months later, the real estate industry reconvened, this time in San Diego, where more than 20,000 Realtors flocked to the local convention center to hear from dozens of knowledgeable speakers, partake in various charitable endeavors, and even catch some tunes from musician John Legend. For a recap of Placester’s time in Southern California, check out our round-up blog post.
- Countless other distinct real estate industry conferences took place throughout 2015 — from Keller Williams’ Family Reunion and Mega Camp to RE/MAX’s R4 Convention and RE/CHARGE events. Get the inside scoop on all of the biggest real estate gatherings in this comprehensive guide.
4) CFPB Takes Even More Substantial Actions to Improve Consumer Credit
The Consumer Financial Protection Bureau (CFPB) — the government-created agency dedicated to protecting consumers’ rights (including home buyers) — has handed down mortgage regulations and rules for a few years now. While opinions vary on their effect on the housing market at-large and whether they should’ve been instituted in the first place, the fact remains these directives, including ones levied in 2015, have changed the home buying landscape.
- The primary rule passed by the CFPB that’s arguably had the biggest effect on the real estate industry (and led to an array of different housing market predictions, based on its projected impact on the sector) was the Real Estate Settlement Procedures Act and Truth in Lending Act Integrated Disclosure (TILA-RESPA) regulation, also referred to as “Know Before You Owe.” As CFPB Director Richard Cordray noted at the end of the year, though, the regulatory measure hasn’t deterred mortgage shopping.
- The CFPB provided some noteworthy resources during 2015 as well, including a home loan shopping toolkit, which aims to help consumers learn how to shop around for mortgages and find the best rates, and a financial coaching initiative intended to help fiscally vulnerable consumers, such as recently transitioned military veterans, better their personal finances so they can gain access to better credit and, in turn, purchase homes. Both of these tools, along with the dough the CFPB has helped Americans save, could ultimately help consumers who have been on the sidelines for months (or even years) finally enter the market and buy homes for sale.
5) Mortgage Lending Standards Ease, While Housing Affordability Increases
There are many ramifications of the CFPB’s work in making the ability to secure mortgages far easier (and safer) for consumers nationwide, but given the state of post-housing crisis America in recent years, lenders have been wary of providing home loans to prospective home buyers. Having said that, 2015 saw lending standards ease a bit, which led to slowly but surely improving home sales numbers.
- Fannie Mae research discovered mortgage lending improved in the third quarter of 2015 for all loan types, while the likelihood these loan standards would alleviate further in the final three-month period of the year was high, according to a number of mortgage banking executives surveyed by the government-sponsored enterprise.
- Moreover, a joint report between RealtyTrac and Clear Capital notes housing affordability reached its two-year peak during the first quarter of the year, despite a higher rate of home price appreciation compared to consumer wages. What really aided this affordability improvement were the consistently low mortgage rates throughout the first three months of 2015. The average rate for 30-year fixed-rate mortgages has hovered around 4% for some time, and isn’t expected to jump much further (if at all) in 2016.
- Despite this positive news, the most recent Housing Affordability Index from REALTORS for the end of 2015 indicated buyers’ ability to afford median-priced homes was limited to start the final quarter of the year, due largely to a disparity between income levels and “unhealthy price gains.” Historical data for this report, though, shows no indication of this ebbing affordability becoming a weak point for the U.S. housing market.
6) Millennials Continue to Make Up Bigger Portion of Overall Home Purchases
One segment of the population that has certainly had a rough go of it in terms of housing affordability in recent years are Millennials. Generation Y has dealt with the brunt of the student loan crisis, hindering many of them from evening considering a home purchase. And yet, through the fog of endless, excessively high monthly payments, this demographic still ended up as a fast-growing home buying group in America during the course of 2015.
- In fact, the largest group of buyers, per REALTORS’ Home Buyer and Seller Generational Trends study, was indeed Gen Yers, who accounted for one-third of all U.S. buyers. The trade group’s lead chief economist, Lawrence Yun, noted the desire to own a home and the long-term benefits of investing in real estate seemed to outweigh any financial shortcomings and doubts Millennials (and even members of Generation X) may have.
- Not every market in the country has likely seen a marked rise in the amount of Millennial home buying activity, as it seems this generation — more so than others — is more keen on living in areas that make getting around transportation-wise easy. A separate REALTORS report found living in a community that makes it simple to travel from one place to another by walking was far more preferred than driving-friendly areas.
- Renting has long been the most preferred option for Gen Yers, but given high lease rates across the nation, it’s now actually become more affordable for Millennials to make a down payment and purchase homes, according to research from Trulia — a trend that could end up helping the overall housing sector in 2016 and beyond.
7) Home Buyer and Builder Sentiment Uneven, While Realtor Confidence High
Agents and brokers looking for evidence of future housing market performance often turn to research in which consumers and industry members are surveyed, polled, and interviewed — and there was certainly no shortage of these types of opinion-based studies to come out during 2015.
- Home buyer confidence kicked off 2015 on a relatively high note compared to the previous couple of years, but that positive sentiment dwindled modestly and, ultimately, remained uneven throughout much of the year.
- More than three-quarters of consumers polled by Zillow feel mortgage rates will rise somewhat or significantly through the first half of 2016. Whether this deters those considering a buying a home remains to be seen. However, if Fannie Mae’s Home Purchase Sentiment Index — which shows confidence among prospective buyers remains high compared to the previous five years — is any indication, sales could continue to climb at a modest pace.
- Meanwhile, confidence in the single-family housing market among residential construction firms nationwide remained relatively healthy at year’s end. According to the National Association of Home Builders/Wells Fargo Housing Market Index, the final sentiment report for 2015 ended at a mark of 61, meaning building firms are moderately bullish on the state of the market.
8) Internet Remains Primary Home and Agent Search Tool for Buyers and Sellers
When it comes to promotional and sales activities, agents and brokers can rest assured their transition to online real estate marketing plans will continue to pay dividends moving forward. The data continues to denote the internet is the go-to resource for home buyers and sellers — and that digital marketing strategies geared toward reaching these consumers continue to work wonders for industry pros all over.
- The most effective digital real estate marketing strategies among agents and brokers during 2015 included promoting their brands via email and Facebook, setting up Google AdWords campaigns, and implementing SEO strategies, a special Inman News report shows. Given that more than half of agents surveyed said lead generation was their primary goal with their online presence, this is reassuring data for industry pros who’ve moved to mostly digital channels and tactics.
- Agent and broker websites played a major role in gaining leads and clients. The 2015 Profile of Home Buyers and Seller from REALTORS states 42% of buyers begin their listing search online, with 82% of buyers stating they found agents’ sites useful in their efforts to find homes for sale.
- Email marketing has become a cornerstone in many agents’ online strategies today, and it’s easy to see why: Real estate brands experienced an average email open rate of 26% in the past year — just one of many 2015 digital marketing statistics showing the efficacy of going online with your marketing.
9) Previously Hard-Hit Housing Markets Show Significant Signs of Life During 2015
Agents working in some of the weaker real estate markets nationwide undoubtedly have been looking forward to improvements in their areas for some time — some since the housing downturn began before the turn of the decade. Now, though, a number of these once-beleaguered metro markets — from Arizona to Florida — have seen conditions return to pre-recession levels.
- In terms of the nation’s 50 largest housing markets throughout the U.S., Seattle was deemed 2015’s hottest, Auction.com reports. Three of the other four to round out the top-five, though, are located in the Sunshine State and were once considered some of the worst-hit communities economically and real estate–wise since 2008.
- Markets that haven’t seen poor housing conditions during the past several years — including San Francisco, Dallas, and Denver — remained strong during 2015. According to Realtor.com, the three cities were the healthiest as of the end of 2015.
- Michigan was deemed one of the most robust states as well for its many strong housing markets. In Nationwide’s Health of Housing Markets Report for the third quarter, four cities from the Great Lake State made the cut for having the sturdiest real estate markets.
10) Housing Market Forecast 2016: More Good News Ahead for the Residential Sector
“Current housing market conditions are decent, but next year’s will be much, much better.” That’s the prevailing optimism many real estate agents have at the end of each calendar year. While this sentiment simply isn’t the case with each passing year and some analysts and economists forecasting so-so conditions in the year ahead, there also happens to be plenty of positivity from industry outsiders for 2016.
- “We are a long way from returning to pre-recession levels in terms of mortgage accounts, but changing consumer preferences for housing also may play a role in this slow recovery. If the economy continues to perform well, we do believe the net number of mortgages will increase over the next year.” — Steve Chaouki, TransUnion
- “The risk that Fed tightening will derail the housing market therefore appears low. Rather, perhaps more of a concern is the risk of another boom. After all, for a really damaging housing bust to occur, you first need prices to spiral way above their fundamental values.” — Capital Economic report (via HousingWire)
- “As price growth ebbs and mortgage rates rise, more homeowners will stay put. Sales will grow about half as fast as they did this year and prices will rise at a more normal 3.5 percent to 4.5 percent, down from almost 6 percent this year.” — Nela Richardson, Redfin
- “For all of 2016, total home sales are projected to rise 3.9 percent. We believe that further easing of mortgage lending standards will combine with a positive household formation outlook to help the housing sector expand.” — Doug Duncan, Fannie Mae
- “As we approach the start of 2016, the consensus view among economists is that economic growth will continue, and the U.S. will enter an eighth consecutive year of expansion in the second half of next year. Most forecasts place growth at 2 and 3 percent during 2016, creating enough jobs to exert downward pressure on the national unemployment rate.” — Frank Nothaft, CoreLogic
In addition to keeping up with the latest housing market trends, it’s imperative to stay up-to-date with the most recent digital marketing statistics. Check out dozens of online marketing stats from 2015 in our in-depth SlideShare.
What other major housing market news and important real estate industry trends did we miss in this post? What does your 2016 housing market forecast look like? Share your real estate market forecast with us in the comments below!
Published on December 19, 2015
Written by Matthew Bushery
I’m the Sr. Content Creator for Placester, where I educate real estate professionals about modern marketing and, in turn, help agents and brokers make the most of their online presence, earn more traffic, and generate more leads and business.