1) Stable Inventory. 2013 was noted for its historically low inventory. In previous months, inventory gradually increased, although average age of inventory is still lower (down 11% in 2013), illustrating the fact that homes are selling faster than they were in 2012.
2) Positive Equity. Increased home prices helped 25 million homeowners regain positive equity status during the second quarter of 2013. Median list price for homes in October rose 7.57 percent above that of October 2012. Home prices are expected to continue increasing in 2014, which is good news for the 7.1 million homes still in negative equity (as of the second quarter of 2013).
3) Fewer Foreclosures. Foreclosure inventory has dropped to multi-year lows, indicating that foreclosures will have a minimal impact on the 2014 housing market. In fact, September 2013 marked the 36th consecutive month with a year-over-year decrease in foreclosure activity.
4) Increased Mortgage Rates. Even though mortgage rates have already increased 100 basis points in 2013, they are nonetheless expected to rise. Janet Yellen, the chairman-designate of the Federal Reserve, pledges to continue the policies of Ben Bernanke, including keeping mortgage rates low by buying blocks of mortgage-backed securities.
5) Less-Afforable Homes. Increased home prices have outpaced increased income, resulting in the lowest Home Affordability Index in five years (as published by the National Association of Realtors).
While some of these patterns are favorable and others are not, it is important to remember that they are only speculative. The real estate market changes every day, alongside changes in the general economy. Keep up with my blog in order to stay informed of real estate market trends!
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