Phipsi-snowWhat should we expect to change in real estate over the next 12 months?

That’s the question making the rounds with industry writers and analysts across the country, as the end of 2015 nears and they set their critical gazes on the new year. Everyone has their own educated guesses and professional opinions, like Beth Braverman with The Fiscal Times, who recently offered up her own 10 predictions as to what will happen to housing trends in 2016.

Included on the list: First-time buyers will continue to struggle, a symptom of the “muted housing recovery;” credit will get a little looser, and banks may be “more willing to work with homebuyers over the next year as the volume of refinances falls as interest rates rise;” and it will still be cheaper to buy than rent, with the current climate representing the best time to buy since 2012.

Braverman’s first couple of housing trends are listed below. For the others, check out the article on the website for The Fiscal Times.

1. Home prices will continue to rise…moderately.
Economists and housing experts surveyed by Zillow expect home values to grow an average of 3.5 percent with most markets experiencing modest gains. That’s closer to historical averages and more sustainable than double-digit increases. However, some economists are worried that price appreciation may be approaching bubble territory in some hot markets like San Francisco, Denver, and Dallas.

2. Interest rates will inch up.
Economists widely agree that the Fed will increase its fed funds rate gradually throughout the year. Rates on adjustable-rate mortgages, which are tied to the prime rate that tracks the fed rate, will react immediately to a Fed hike. The rate on the 30-year fixed mortgage will increase slower, because it follows the yield on the 10-year Treasury, rather than the fed rate.

Rates on a 30-year mortgage currently stand at about 4 percent, up from record lows but still extremely attractive by historical measures. The Mortgage Bankers Association expects rates to reach 4.5 percent in 2016.

While some worry that higher interest rates would dampen the housing market, job security and wage growth are larger factors on home activity than interest rates.