Buying a House in 2014 - Market Trends You Need to Know

Buying a House in 2014 - Market Trends You Need to Know

Buying a House in 2014 - Market Trends You Need to Know

The U.S. housing market recovered in 2013 better than most industry analysts expected. With the help of historically low interest rates, a tight inventory and rising stock prices, more people bought homes last year than they did in 2012. Some positive trends are expected to continue during 2014, while others are estimated to slow down, and still some factors will perhaps affect affordability for those bordering on so-so credit.

The following are the 2014 housing market predictions from the experts:
Inventory Should Return to Historic Levels

According to Realtor.com, 2013 was a prime time to sell. Bidding wars erupted in many parts of the country due to few houses on the market and the persistently low mortgage interest rates. Buyers scrambled to move into homes before the Federal Reserve pulled the plug on those sweet rates.

However, many homeowners who bought during the peak of house values refrained from putting their property up for sale during last year, hoping to wait until prices caught up to what they still owed the bank.

"I had a lot of people put their house on the market and take it off again several times because they weren't getting offers, or the ones they did receive were not enough to make the sale worth it to them," said 20-year veteran real estate agent Daryl Bronniche.

As market analysts predict, home prices in 2014 will continue the trend of slow but steady increases, and those tepid would-be sellers should start putting their homes up for sale.
Equity Should Return for Current Owners

According to Realtor.com, more than 7 million homeowners are still under water on their mortgage as of 2014, despite millions more finally seeing their home values increase during 2013. If home prices continue to rise as projected, more homeowners should return to positive equity status during the coming months and seasons.

This is good news for many homeowners. While home values increase, however, so can the premiums that residents pay for their homeowners insurance. It's important to conduct a policy review on your homeowners insurance every few years, especially when market prices fluctuate. If you are wondering what impact the home value movement may have on your homeowners insurance, independent agents on the Trusted Choice network can help. It's always a good idea to compare what you're paying now to several other quotes from various insurance companies to be certain you're paying the most affordable rates.
Foreclosure Rates Should Continue to Slow

The number of banked-owned properties should continue to decline during 2014, as it did significantly in 2013.

"Of course, this really depends on where you are in the country," Bronniche said. "Some areas remain quite depressed, and while jobs are still being hunted, people are still losing their homes."

According to RealtyTrac, a foreclosure tracking firm headquartered in California, states such as their home turf, Maryland, Nevada, New Jersey, Illinois, Connecticut, Ohio, South Carolina, Georgia and Wisconsin, foreclosures rates this past February were much higher than elsewhere in the nation.

In the other 40 states, however, industry trackers do not believe foreclosures will play a major role in the housing market of the year to come.
Mortgage Rates Should Rise

Following the trends of 2013, home loan interest rates should continue to increase slightly during 2014. Despite new Federal Reserve Chair Janet Yellen at the helm, industry experts predict familiar tactics used by her predecessor, Ben Bernanke, that will keep them lower than traditional levels as the economy still struggles to improve. So while the upcoming year may see slight increases in interest rates, they should still be appealing for potential home buyers.
Affordability May Be Tightened

So what does all of this mean for those thinking of buying or selling a home in 2014? For buyers, Bronniche worries it may mean paying more for a home in 2014 than they would have had they purchased in 2013.

"Higher interest rates, combined with increased home prices, means some people may be priced out of the market this year," he said.

For sellers, especially those who have been waiting for prices to increase before putting their property up for sale, 2014 may just be their year.

While no one has a crystal ball, Bronniche said, in real estate, one thing remains true no matter what:

"It's constantly changing. March 2014 may be much different in terms of the housing market than November 2014," he said. "The key is to keep your finger on the pulse and plan accordingly."

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