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.
Currently run by Joseph Sabeh, Jr., who has worked with the company for over 13 years, Executive Homes Realty is a leading real estate business in Fremont, California. Committed to supporting the community in which the company has thrived, Executive Homes Realty has supported several local schools and is actively involved with the Harker School in particular.
Established in 1893, the Harker School educates students from kindergarten through grade 12. A college preparatory day school, Harker provides challenging and comprehensive academic and extracurricular programs and a nurturing environment that fosters respect and kindness among its students. The school’s curriculum is designed to embrace individuality and diversity, promote leadership, and help students become productive adults.
The Harker School not only engenders academic success, but, through its arts and athletics departments, encourages the discovery of individual talents. Harker feels that playing sports builds teamwork and leadership skills, as well as a sense of fair play and confidence. The school also believes that the performing and visual arts build teamwork as well as individual initiative. By providing students with access to drama, music, and fine arts programs, Harker hopes to develop creativity and artistic expression among its students.
Home prices in most metropolitan areas grew significantly in the third quarter, with the national median price rising at its fastest annual clip in nearly eight years, according to the National Association of Realtors (NAR).
During the same period, existing homes sold at the fastest annual rate recorded in more than six years, according to NAR’s latest quarterly report on metro area median prices and affordability.
Despite the robust price growth, NAR estimated that potential buyers still had adequate income in most areas to purchase a home in the third quarter. Nonetheless, market momentum is changing, according to Lawrence Yun, chief economist at NAR.
“Rising prices and higher interest rates have taken a bite out of housing affordability,” Yun said. “However, we have the ongoing situation of more buyers than sellers in the market, so lower sales will help to take the pressure off home price growth and allow them to rise slowly at a single-digit growth rate in 2014.”
The national median existing single-family home price increased by 12.5 percent year over year to $207,300 in the third quarter, the strongest year-over-year gain since the fourth quarter of 2005 when it shot up 13.6 percent, according to the trade group.
In the second quarter, the median price reportedly rose 12.2 percent year over year. Meanwhile, NAR said existing-home sales jumped 5.9 percent to a seasonally adjusted annual rate of 5.36 million in the third quarter from 5.06 million in the second quarter.
On an annual basis, they reportedly increased 13 percent. The third-quarter pace of sales was the highest recorded since the first quarter of 2007, when it hit 5.66 million, NAR said.The report’s findings also highlighted the market’s sharp inventory shortage. At the rate of sales in the third quarter, the existing-home inventory of 2.21 million homes for sale would have cleared in just five months, down from 5.9 months in the third quarter of 2012.