31 Jan 2015 Trends – Housing, Moving and Relocation
Kicking off 2015, there are a litany of forecasts and predictions around mortgage rates, housing and hiring. What will the year shape up to be? How will trends and movements in the housing market impact relocation and talent management? Home prices and mortgage rates are key in relocation. They can often be the determining factor in whether an employee or recruit accepts a relocation-based position or not. And, they can also significantly impact the cost for the corporation.
As has been the case the past several years, predictions are that mortgage rates will continue to rise throughout 2015. Currently, rates are just below 4 percent for a 30-year fixed rate mortgage, but analysts and Freddie Mac as well predict that rates will hover around 5 percent by the end of this year. Housing continues to be a bit of a roller coaster. Coming off of household value appreciation of 9.3 percent in 2013, that percentage dropped by over 50 percent in 2014, to just 4.5 percent. And, it’s not looking much better for 2015, with estimates of just 3 percent this year. According to Freddie Mac, continued home appreciation combined with rising interest rates will make it harder for homebuyers. But it’s also important to note that we’re moving from ‘very high’ affordability to ‘high’ affordability, signaling that it’s still an attractive time to buy.
Shifting gears a bit, predictions around hiring vary a bit for 2015. Some predict solid growth in key specialty jobs, like marketing, but tougher conditions in both non-profit and government. Others are focused more on the shifting conditions in employment, with increased flexibility, more start-ups, and a rise in freelance work.
The economy is still in recovery mode. Mid- and large corporations will continue to need to relocate talent to fill key roles, but I expect a continued focus on efficiency and management around policies and expenses. Exceptions will be made, but core relocation benefits will continue to be scrutinized. Relocation service providers will also need to continue to focus on efficiency, operational process and transparency in order to support customers and offer competitively prices services.