Economists are predicting housing prices to continue to rise next year — but only at about half the rate that they did in 2013, Money Magazine reports.
However, “for a sustainable recovery, you want to see more balance between buyers and sellers,” says David Stiff, chief economist at CoreLogic Case-Shiller.
Home sales will likely see modest growth next year, says Lawrence Yun, chief economist at the National Association of REALTORS® . Strict underwriting practices by lenders, rising interest rates, and tight inventories in many markets will moderate sales growth. NAR has predicted home sales of about 5.12 million for 2014, which is close to the same level forecasted for 2013.
Buyers will likely be greeted by higher mortgage rates. The 30-year fixed-rate mortgage is expected to increase from a 4.5 percent average to more than 5 percent in the new year.
Also, buyers will still face tight underwriting standards. While real estate professionals are reporting that qualifying for a loan is getting easier, the speed of processing the loan has not improved.
Source: “Real estate: Look for value in 2014,” Money Magazine (December 2013) and “NAR: Price Gains, Not Sales, to Drive Housing Growth,” REALTOR® Magazine Daily News (November 2013)