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1. Home prices will finally calm down.
Real estate values have been on the rise for a while, but are likely to slow their pace in 2016. Prices are expected to rise 3.5%, according to Zillow's Chief Economist Svenja Gudell. Buyers who've been stuck behind the wave of rising prices may finally get the chance to jump in. And that could lead to a flood of buyers, said Jonathan Smoke, chief economist at Realtor.com. "We have the potential for about six million home sales just through the months of April through September of 2016; that is basically impossible to do," he said.
2. More homes will hit the market.
The slowdown in home prices will prompt more owners to list their homes, Smoke said, giving buyers more choice.
"Because of the price appreciation they have experienced, you will have more sellers put homes in 2016," he said. The new home market is also expected to grow in 2016 with builders focusing more on starter and middle-range homes, which will also boost inventory and make it easier for buyers. With more homes on the market, bidding wars will become less common and prices could ease even more.
3. Dirt cheap mortgages could disappear.
The Federal Reserve is widely expected to begin increasing interest rates soon, which means the window for record low mortgage rates is closing. While rates are expected to go up gradually, higher rates push up borrowing costs and monthly mortgage payments. "You are likely to get the best rate you will possibly see, perhaps in your lifetimes through the majority of 2016, but certainly, the earlier the better," said Smoke.
4. Rents will still hurt.
Rent prices are expected to continue to climb in 2016, which means in most cities, buying will be cheaper than renting. Even though mortgages could get more expensive, buying might still be the better deal. Interest rates would need to rise to around 6.5% for the cost of buying to equal that of renting on a national level, according to Ralph McLaughlin, housing economist at Trulia.
SOURCE: CNN MONEY, DECEMBER 4, 2015