Speaking at the 2013 Realtors Conference & Expo, National Association of Realtors (NAR) chief economist Lawrence Yun predicted the real estate market would continue its recovery in 2014 with home prices rising 6% and mortgage rates hitting 5.4%.
Other factors aim to keep the housing market on track although there could be a possible negative impact due to rising mortgage rates, however, job creation and loosening mortgage underwriting standards should balance out next year's sales volume.
Looking over the past year, Yun said he expects existing-home sales to be up about 10% in 2013 to 5.13 million. Sales in 2014 are expected to hold fairly even at about 5.12 million.
Reviewing price movements, he said the national median existing-home price should end this year about 11% higher than 2012, climbing to $197,000. Next year’s growth is expected to be cut nearly in half at about 6%.
Over the past two years, Yun says existing-home sales have shown a 20% cumulative increase, while prices have gained 18% however, incomes have risen just 2-4% in this time frame.
“We’ve come off of record high housing affordability conditions in the past year, and are now at a five-year low, but conditions are still the fifth best in the past 40 years,” Yun said, noting that the median-income family should still be “well-positioned” to buy a home in 2014 in many areas.
Aside from affordability, ongoing headwinds include limited inventory conditions and stringent mortgage standards, both of which are expected to improve as home values continue to rise and banks relax their stringent lending standards.
Limited supplies were a key factor in price appreciation in 2013, with inventory bouncing around 13-year lows, and distressed property sales (short sales and bank owned foreclosure listings) trending steadily down.
On housing production, Yun forecasts 917,000 starts through the end of 2013 and 1.13 million in 2014, which still falls short of the underlying demand of about 1.5 million.
Sales of new homes are expected to total 429,000 in 2013 and 508,000 next year.
Based on his forecasts, Yun says the top 10 markets to watch for a housing turn around in 2014 are Salt Lake City, Utah; Naples and Tampa, Florida; Atlanta, Georgia; Boise, Idaho; Houston, Texas; Charlotte, North Carolina; Denver, Colorado; Seattle, Washington; and Tucson, Arizona.
If you, or someone you know is considering Buying or Selling a Home in Columbus, Ohio please contact The Opland Group. We offer professional real estate advice and look forward to helping you achieve your real estate goals!
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