Saturday, March 8, 2014

Real Estate Market in 2014

Everyone is always looking to have a home to purchase, or sell, or are currently paying off mortgages from their previous home purchase.

The year 2013 saw a quick surge in home prices. In 2014, you can expect to experience an increase in prices, but not as big a rate as in 2013. The rate of increase in prices in 2014 will be slower, steadier, and not as volatile. This is still good news for those who have delayed in re-selling their purchased homes. There are those who have purchased homes in 2006, at the height of the real estate boom, and have waited to re-sell these purchased homes in hopes to get a higher profit out of their investment. That time has come. 2014 will be a seller's market in real estate.

As mentioned, the increase of prices in 2014 will still continue, though it won't be as notable. Prices will rise as much as 6%, which is almost half the price increase from 2013.

2014 is not such a good year for homebuyers. Mortgage rates will continue to increase, and buyers won't enjoy the low interest rates from 2013 anymore. It has been predicted that the interest rate for a 30-year fixed mortgage could rise to about 5.5% within 2014.

The advantage to rising mortgage rates is lower lending rates. Simply put, higher mortgage rates will discourage buyers and those who would apply for home loans. Due to this, financing companies will lower their standards on interest rates so as to entice more borrowers to apply for home loans. Real estate is a push and pull industry, and one part corresponds to another. Any change in behavior of one factor, affects the other factors in real estate. It is really up to you to swing along with the changes, so it won't affect your finances in the long run.

On the upside, there will be foreclosures in 2014. It seems that finally, the foreclosure crisis is tapering off and fewer homes will be foreclosed. However, the real estate industry won't get back on track until around 2015, wherein they predict that the foreclosure crisis will finally be settled. It should be noted that this catching up was brought on from as far back as prior to the foreclosure crisis, so there was a lot of work to be done.

Aside from buying and selling, real estate also has another strong market: the rental market. If home prices are increasing, less people might want to purchase homes. As a result, they will attempt to rent their homes while prices are still high. The rental market will definitely thrive this 2014.

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