Real estate continues to be a good place to invest. Lawrence Yun, the National Association of Realtor’s Chief Economist, recently stated, “Although the final months of 2013 are finishing on a soft note, the year as a whole ended with the best sales total in seven years.”
Total existing-home sales are expected to total 5.1 million for 2013. That is a gain of almost 10% over 2012. The level is expected to rise to 5.3 million in total sales by 2015. The national median existing home price for 2013 was $197,300 and is projected to rise by 5-5.5% in 2014.
As we approach the busy buying months of the spring season, we are entering a seller’s market. Inventory is down, which drives prices up. I will be watching the mortgage rates in combination with strong price gains for 2014. These factors could slow the market, but sales should remain stable.
May 2014 be a year of happiness and prosperity to you and your loved ones.
One trend for 2014 is the entry of more young buyers (ages 35 and younger). Recently released Census data shows that the younger Americans purchase history has improved by .5% over last year and continues to be heading up.
Men and women, especially women, prefer urban locations. Good schools and proximity to work are must haves for both sexes of younger buyers. Being close to restaurants and entertainment rank high on the preference list, while proximity to public transportation and affordable home prices is lower on the list. Most young buyers think of their purchase as at least a five year investment.
Among young Americans, home ownership is gaining steam. That is good news, since they have generally rented and watched the market for the past four to five years .
The ability to qualify for a good mortgage will have a significant effect on the real estate market for 2014. Mortgage reform kicked in on January 10th of this new year.
The Consumer Financial Protection Bureau wrote the new rules. Their goal was to protect homeowners from risky mortgages, according to CNBC’s Money Talk News. The downside is that these rules make it harder for some people to qualify for a home loan.
The Ability to Repay Rule requires lenders to evaluate the financial fitness of the buyer. The ability to repay is based on the buyer’s following variables: assets, employment, monthly payment, other debts, child support or alimony, and credit history. The buyer’s total debt should be less than 43% per these new guidelines.
The ability to put a down payment of 20%+ will help ensure a loan. Statistics show that buyers with very low down payments will have a much higher chance of walking from a loan.
Mortgages insured by the federal government have looser requirements.
Understanding your mortgage options is vital to buying a home today. If you have questions, I can suggest some professionals.