With a good year for the U.S. housing market behind us and 2014 to look forward to, the housing market for the coming year isn’t all roses. But, there are some clear high points for both sellers and buyers.
It’s been 7 years since the worst housing market crash in the history of the United States. As banks were bailed out and the stock market stumbled, home prices continued to fall. It was estimated that by the end of 2011, 31 percent of all U.S. homeowners were underwater in their homes. The past 3 years have seen a slow come back. Here are some things to look for in the housing market in 2014.
Increased Sales
Home sales are expected to grow by 14 percent in 2014. Mortgage rates are still historically low. With consistent increases in the prices of homes in 2013, many feel that the housing market has finally hit bottom and is now on the upswing. This may be enough for people to start thinking about getting back into the market.
In fact, data suggests that buyers are closing on properties faster now. In November 2013, homes were selling 11 percent faster than they were a year prior, according to the latest data from Realtor.com which tracks for-sale listings. In several cities, that rate is even higher. For instance, homes were selling 20 percent faster in New York and Miami, and 18 percent faster in Chicago and Dallas. This may be due to the limited number of homes for sale in some areas and rising mortgage rates that are causing a sense of urgency on the part of homebuyers. As mortgage rates get higher and more people feel comfortable about putting their homes on the market, sales are likely to slow. However, they will still be better than they have been in the past several years.
Rise in Homeowners with Positive Equity
The first quarter of 2012 ended with over 30 percent of homeowners owing more than their homes were worth. However, thanks to rising home prices, approximately 5 million homeowners have positive equity in their mortgages. As many as 10.8 million still have less than 20 percent in home equity, but the numbers in the real estate market and the economy at large are expected to improve in the coming year. The National Association of Realtors® forecasts that prices of existing homes will have risen 6 percent by the end of the year.
It is likely that this year will see a shift from a refinance dominated mortgage environment to one driven by purchases – for the first time in over a decade. “With the close of 2013 will also come a major transition in the housing finance industry,” said Frank Nothaft vice president and chief economist with Freddie Mac. “For the first time since 2000, we’re going to see the mortgage market dominated by purchase activity as the refinance share drops below 50%. And with mortgage rates rising, we’re also going to see the home-sales gains as well as the impressive house price growth begin to moderate to more sustainable levels.”
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Call me today to see how I will sell your home in the Desert!
