Rising Home Prices
Over the past year home prices have risen nationwide by 10.9%. Home prices will continue to rise in 2014, however, at a slower, steadier pace – around 3-6%. Rising home prices have helped many homeowners regain positive equity status and with home prices continuing to rise in 2014, even more homeowners will benefit. These homeowners will also be able to sell their home adding to the housing inventory.
Rising Mortgage Rates
2013 was a volatile year for mortgage rates as the Federal Reserve announced that they will be reducing their stimulus program, which has been keeping mortgage rates low for several years. The first taper occurred in December and will continue as the economy improves. This will likely cause mortgage rates to rise which may put pressure on some markets but won’t hurt the overall housing recovery.
Inventory to Remain Low
With the inventory shortage, many homes, especially distressed properties, were bought by investors paying with cash. Heading into 2014 the market is improving which means there are less distressed properties to purchase and fewer investors in the market to compete with. Low inventory of homes listed for sale will continue in 2014 but with sales of newly built homes expected to increase 18.5%, there should be more available homes to purchase.