What Experts Predict For The 2014 Housing Market The U.S. real estate market made a robust
comeback in 2013.... according to Realtor.com, Michele Lerner. In an article written on December 6, 2013,
Michele offers the following information: “…surpassing expectations of many
economists, as the combination of low inventories and historically low interest
rates caused home prices to rise and even helped fuel bidding wars in some
markets, surpassing the expectations of many economists. While positive trends,
such as increasing home values, are expected to continue into 2014, mortgage
rates are also expected to rise in the coming year and could put a damper on
home buyers’ abilities to afford new homes.
According to the Realtor.com article, looking back at some 2013
data can give us a hint of the year ahead:
1. Inventory Should Gradually Stabilize and Return to
Traditional Seasonal Levels
The beginning of 2013 could be
characterized as the “year of low inventory” as buyer demand ramped up and
homeowners waited for further price increases and evidence of a solid economic
recovery before putting their homes on the market. The year began with a
significant shortage of inventory (reported by realtor.com®), and then as early
as February the level of shortages started to decline slowly. As 2013 comes to
a close, inventory is approximately the same as a year ago. However, homes are
selling faster than in 2012, with the median age of the inventory down by 11
2. More Homeowners Are Likely to Return to Positive Equity
Rising prices helped 2.5 million
homeowners who were previously underwater regain positive equity status during
the second quarter of 2013. However, approximately 7.1 million homes were still
in negative equity at that time and an estimated 10 million homeowners, or
about 21.1 percent of all homeowners with a mortgage, remained
“under-equitied,” with less than 20 percent in home equity. The good news is
that prices are expected to continue rising in 2014, which will lift more
homeowners into positive territory. According to realtor.com®, median list
prices for homes in October rose 7.57 percent above the same month of 2012.
3. Mortgage Rates Are Expected to Rise Mortgage rates increased approximately 100
basis points in 2013 and are likely to rise in 2014. The new chairman-designate
of the Federal Reserve, Janet Yellen, is expected to continue the policies of
Chairman Ben Bernanke, including keeping mortgage rates low by buying blocks of
mortgage-backed securities. However, the Fed has considered tapering its
bond-buying activity as the economy improves, which could lead to a slight
increase in interest rates.
4. Foreclosure Activity Is Expected to
Foreclosure sales are likely to play a
minimal role in the housing market in 2014. September 2013 was the 36th consecutive month with a
year-over-year decrease in foreclosure activity. Foreclosure inventory has
dropped to multi-year lows, down nearly 33 percent since the end of 2012.
Foreclosure starts were down 39 percent in the third quarter of 2013 to the
lowest level since the second quarter of 2006.
5. Further Declines
in Home Affordability Are Expected
The National Association of REALTORS®’
Home Affordability Index, which compares home prices with income, dropped to a
five-year low in 2013 as price increases outpaced income growth. If the U.S.
economy begins to grow at a faster pace and incomes begin to rise, though, the
affordability index will slide further from rising mortgage rates.
It is uncertain what the housing market will be throughout
2014….The only constant in real estate is that the market continues to change.
Contact me for your community’s current information.
Author:S PIZZOLATO DEBRA Phone: 702-348-8350 Dated: February 18th 2014 Views: 457 About S PIZZOLATO: ...
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