Posted by Alisa Martin on Tuesday, 18th March 2014

The real estate market is constantly changing. The market condition today is not the same as it was a few years ago, or it would be a few years later. This year too, the property market is likely to see some changes. In the year 2013, the property market was quite bright, with prices rising high, few homeowners underwater, and confidence of builders on the upswing. 2014 seems to be another good year for the housing market. This article outlines what the housing experts are expecting to see this year.

Availability of houses would be more  

At the beginning of 2013, lower supply drove the prices up. However, it is likely to change this year. The shortage in houses available for purchase had begun to soften from February. New construction and increasing prices are likely to bring more houses to the market this year. These houses include both old and new. In 2014, inventory seems to return to the traditional levels. Hence, if you looking for a house offered for sale in the area of St James. you are likely to find many properties matching your requirements and tastes.

Mortgage rates would increase:

Zillow, a real estate database online, states that mortgage rates would rise to 5% by 2014’s end. The new chief of Fed Reserve is likely to keep mortgage rates low through the purchase of mortgage-backed securities. However, the bond-buying taper of the Fed can push the mortgage rates higher. Although this would make houses quite expensive to be financed, still the rate of mortgage in the 5% range is quite low. On a loan of $200,000, the monthly payment would increase by $160 roughly.

Getting mortgages would be easier:  

The rising interest rates would be accompanied with ease in obtaining loans. As the rates would increase, the lenders would need to compete for buyers by loosening the standards of lending.

Home prices would increase by 3%:  

Zillow and Redfin predict that there would be an increase in home prices by about 3% to 5% this year. In 2013, the house prices rose by 5%, with rises over 20% in some of the hot spots. Though such gains were advantageous in a number of ways, they were also unsustainable and violated the norms of a balanced and healthy market. This year, the gains in home value would significantly slow down due to more new constructions, more supply and higher mortgage rates.

Number of underwater homeowners would be less:  

The rising prices have helped about 2.5 million homeowners having underwater mortgages. These homeowners have regained positive equity status in 2013’s second quarter. Reports show that about 6.4 million homes were in negative equity, in the last year. This figure is likely to shrink this year.

House affordability would decrease:

In spite of the slow rate of price increase, home affordability would reduce with the rise in mortgage rates. This is because the income levels are not increasing with the increase in housing prices.

Conclusion:

These are the trends likely to dominate the real estate market in 2014. People planning to buy or sell properties this year would find this information to be quite useful. By having an idea of the property market, you can get better deals when buying or selling your property.