NEW YORK – Oct. 13, 2014 – The housing market is expected to heat up this fall, but buyers no longer see ownership as a sure path to economic independence.
Bankrate.com recently highlighted some trends to watch this fall in the nation’s real estate market:
1. An overall pick up in housing activity. Some less-than-stellar sales numbers in certain areas of the U.S. this summer were blamed on low inventories of homes for sale. However, the number of listings is increasing, which could unleash some pent-up demand among buyers.
At the end of August, housing inventory was at 2.31 million existing homes available for sale, which represents a 5.5-month supply of homes, according to the National Association of Realtors®. That’s 4.5 percent higher than a year ago.
When buyers have greater options in their home shopping, they may be more likely to finally jump off the sidelines, says Jonathan Corr, president and chief operating officer for Ellie Mae. “The housing market is going to be a function of the economy. I think we are going to see steady growth in the coming months.”
2. Buyers are more cautious. In what most housing experts still describe as a “seller’s market,” buyers seem to be getting more conservative with their spending. “They are sticking to their budgets,” says Pava Leyrer, director of training for Northern Mortgage Services in Grandville, Mich.
The past housing crisis has prompted buyers – particularly the younger generation – to be more cautious, because they’ve learned that home prices don’t always appreciate. Because of that, the younger generation views a house as a place to live, and not the great investment that their parents did, says Daren Blomquist, vice president at RealtyTrac.
Forty percent of the millennial generation believes buying a home is a safe investment with great potential, compared to about 50 percent of boomers, according to a survey by Fannie Mae National Housing Survey.
3. Mortgage rates will climb – really. Housing experts said mortgage rates would rise this year, but those forecasts have largely been wrong – so far.
However, the Mortgage Bankers Association expects the 30-year fixed-rate mortgage to start its climb to 4.5 percent by the fourth quarter, and continue to gradually climb and reach 5 percent by mid-2015. That’s prompted some lenders and real estate professionals to urge their buyers to lock in a mortgage rate now while they’re still at yearly lows.
Source: “5 Housing Trends for Fall 2014,” Bankrate.com (October 2014)
© Copyright 2014 INFORMATION, INC. Bethesda, MD (301) 215-4688