The real estate market in 2013 was a breath of fresh air; home values increased and buyers had stable jobs creating a market frenzy for current homes for sale. Experts expect 2014 to have similar growth, but at a more stabilized pace.
Fixed rate mortgage rates are estimated to linger around 5 percent. The Federal Reserve will continue to step back from directly supporting mortgage lenders and allow room for inflation and economic growth to dictate mortgage rates. Inflation is not a current concern for the market but we all know this can fluctuate throughout the year. Economic growth is expected to become more reliable and strong with the growth in 2013 as a foundation.
Home prices in 2013 skyrocketed with attractively and historically low mortgage rates. While we don’t expect those rates to return, a 5 percent rate on your mortgage is still a below average rate. This higher mortgage rate will have a marginal slow down affect on the current market and home prices. But with the continued economic stability, home prices will remain competitive. Home values will still rise, just not exponentially as we saw in 2013. Last year the number of qualified buyers far outweighed the available homes for sale. We expect more homes to be available this year, which will also aid in leveling out home prices. However, with continued economic stability there will be a continuous need for more and more homes to meet the needs of house hunters.
Qualifying for your home mortgage will have a few extra requirements this year. On January 14 lenders began considering all of your income and outcome, not just current loans as done previously. The intent is to ensure you have the ability to pay your monthly mortgage, all things considered. The debt-to-income cap will operate at 43 percent. Lenders will enforce these considerations to protect themselves from future consumer lawsuits claiming the property and borrowers were not properly assessed. These deeper qualifications will aid in stabilizing the number of buyers in the market as well.
All said and done the excitement of real estate happenings will not diminish in 2014. Sellers and buyers are becoming more educated and aware of the still historically wonderful mortgage rates and will continue to brave the rising home prices for a fantastic investment.