Find,Out,Which,Way,The,2014,Ho family Find Out Which Way The 2014 Housing Market Is Heading
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In the year of 2013, it was a seller's market as mortgage rates were lower and there were plenty of buyers all around to purchase homes even after the waning housing bubble. So, what can be expected of the 2014 housing market?An Increase in Mortgage RatesIn the past several years, the housing market has seen very low interest rates in part due to the Federal Reserve's bond buying program. Svenja Gudell, Zillow's economic director, predicts that mortgage rates may rise because the central bank will not be purchasing as much as it used to. This happened back in September when talk of the banks tapering purchases caused interest rates to rise. Though there may be a low here and there, in general she predicts that rates will go up as 2014 comes into full swing.Slowing AppreciationLast year, the home appreciation values floated at around a 5 percent increase. However, this year she also predicts that the appreciation rate will slow to a 3 percent. During the months of 2013, many homeowners were vying for a tight inventory of homes, and so bidding wars erupted across the country as a seller's market became increasingly apparent. Sometimes, the competition was so fierce that traditional buyers were competing with the offers of companies that buy houses all vying for the same property. This year the market is more likely to stabilize into normal conditions. With more stabilizing conditions, the appreciation of homes will be much slower although an increase will still remain. As a result, there will be fewer investors on the market trying to capitalize on homes as potential investment opportunity, which will also feed back into a lower amount of overall competition.Low Homeownership RatesWhen the housing bubble was at its height, nearly 70% of homes were owned and homeownership was also the largest that it has been over the years. Many of these homeowners were not in a good financial position to purchase a home and soon homes were falling into foreclosure quickly as mortgage payments were missed. With the advent of so many foreclosures and short sales, the market value of homes declined dramatically and homeownership was not viewed as a profitable enterprise as it had during the rise of the housing bubble. During the 2014 months, all of these consequences will continue to play out as more homeowners will turn to renting rather than home purchase. Housing ownership rates may drop under 70% and may even fall below 65%. What does it mean to you?As the seller, do not expect to see the type of bidding wars that occurred in the past years to be the norm when it comes to your neighborhood. There may be a larger inventory of homes on the market because more people will be turning towards renting, but it will be no means an explosive buyer's market since the market will still remain mostly stable, not tipping to the other end of the spectrum. You may expect to see a lot of competition earlier in the year as buyers compete for homes before interest levels rise.For buyers, you can expect to purchase a home at a lower sales price or with more incentives than the frenzy that occurred during the housing bubble's height. As banks turn to other revenue streams, it may be easier to secure a loan. However, you may be paying more for the loan as interest rates increase. So it would be worth it to start looking sooner rather than later if you are planning on purchasing a home. This article has only spoken about the national real estate market so it only gives you a high level overview of the market. When you are looking at real estate you really need to look at the local level because there are always going to be trends specific to one neighborhood and not another. Article Tags: 2014 Housing, Housing Market, Housing Bubble, Interest Rates
Find,Out,Which,Way,The,2014,Ho