Interpretation of 2012 and 2013 United States home sales data signal the housing market is strengthening and recovering exponentially and creating a beneficial period for potential homebuyers to get off the fence.
Home prices in 20 major U.S. cities rose in December 2012 by the most since 2006. Sales of existing homes increased slightly in December 2013, helping to lift sales for the year to the highest amount in seven years, according to the National Association of Realtors©.
So why is now the time to buy? Chief Economist for the National Association of Realtors, Lawrence Yun, believes the market lost momentum towards the end of 2013 due to limited job growth and low inventory. Yun predicts sales growth in 2014 will slow from last year’s 8.8 percent rise and eventually return to normalcy.
Though the market is recovering, certain factors that made home buying so affordable in 2012 and 2013 are changing and potentially driving up home prices. According to a Redfin study, the total number of for-sale homes slipped 14.2 percent across 19 U.S. markets at the end of 2013, which triggered a 0.8 percent increase in December home prices.
Trulia Chief Economist, Jed Kolko, predicts that as affordability worsens in 2014, the first-time and investment buyers are more likely to be shut out. Though Kolko also believes that home-price increases will slow in comparison to 2013, prices will rise faster than incomes and rents. Mortgage rates also threaten to rise in response to the strengthening economy.
Seventy-four percent of American consumers, the highest percentage in three years, said that homeownership was part of achieving their personal American dream. Now is the time to get pre-approved and get a loan commitment so when the time is right for your home purchase, you can go forward quickly and confidently. Speak with one of our mortgage bankers today!
Thinking of purchasing a home in the near future? Our Mortgage 101 Handbook is a great resource for first-time and repeat homebuyers.