Last year, the recovery in the real estate
market was simply a bright spot for the US economy. Home prices shot up,
lesser number of homeowners was underwater on their mortgages and the
confidence of the homebuilders was finally on the upswing. All the
aforementioned positive signs already heralded a better 2014. The experts
predicted that 2014 is also going to be a good year for the US real estate
market. If you’re a homebuyer looking for a new home n 2014 or a homeowner
looking for a refinance of your mortgage loan, here are some real estate market
trends that experts foresee for the year 2014.
- Larger number of homes will be available: During the beginning of 2013, short supply induced rapid increase in home prices but this is something that is going to change in the year 2014. According to reports by Realtor.com, the total homes available for homebuyers or the inventory shortage has already begun to diminish in the month of February. Rising home prices and positive results in the construction market is most likely going to bring new homes, both old and new. This will in turn help inventory return to new levels.
- Interest rates on mortgages will rise: Zillow, an online real estate database anticipates that the mortgage rates will rise to about 5% by the end of this year. 2013 was the year of the homebuyers since the mortgage rates stayed at their record low level for a couple of months. The new Chief of the Fed, Janet Yelen has projected strategies to keep the mortgages rates low by purchasing mortgage-backed securities. However, the tapering efforts of the Fed might again push up the mortgage rates.
- Home loans will be easily available: Like they say, ‘ever cloud has a silver lining’, the silver lining to the soaring interest rates is that homebuyers will find it easier to snag a deal with a mortgage lenders. With the mortgage rates rising higher, the refinance business will be shaken, forcing the lenders to compete for the buyers by loosening the standards of mortgage lending. This will in turn make it easier for the people to get mortgage loans.
- There will be a 3% rise in home prices: Experts also predict that there will be a rise between 3 and 5% in the home prices in the year 2014. In the year 2013, we saw jumps of 5% with rates rising to more than 20% in some hot areas. On the other hand, in 2014, the gains on home value will gradually slow down de to higher mortgage rates, dearer homes and more supply which will be created by fewer underwater mortgage owners.