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Tuesday, December 24, 2013

Mortgage and Real Estate Outlook for 2014

A really great article written by Forbes yesterday outlined several predictions for the housing market in 2014. Most of it is pretty good news, especially for those looking to become homeowners.  Home buyers in 2014 will get a better bang for their buck and lending requirements are going to loosen up, a little that is.

However, the bad news usually follows the good.  Mortgage rates are expected to continue their slow increase over the next year.  That means waiting to buy a home or refinance your home could end up costing you more.

Below is a summary of some of the main points of the article:

More home inventory

One of the biggest struggles in the 2013 housing market was low inventory of homes.  However, the uprise of real estate in the next coming months is helping inventory return to traditional levels.

Mortgage rates will rise

The talk has been for quite some time now but Zillow predicts rates to hit 5% by the end of next year.  However, even at 5% rates remind fairly low.

Home affordability will decrease

As mortgage rates rise home affordability with decline as well.  Though home prices are still at all time lows, waiting to purchase could end up costing you more throughout the year.

Mortgages will become easier to get

Rising rates means a decrease in refinance business which will force lenders to loosen their lending requirements slightly.

Fewer homeowners will remain underwater

Rising home prices have helped 2.5 million homeowners with underwater mortgages regain positive equity in the second quarter of 2013.  Right now about 6.4 million homes remain underwater but expect that number to shrink in 2014.

Foreclosures will close to disappear

The once highly booming foreclosure industry has slowed.  September marked the 36th straight month of year-over-year decreases in foreclosure activity.  The decline will continue with the rise of housing recovery.

Overall, the housing market is looking good in 2014 and urgency is starting to become more substantial. Waiting to purchase or refinance isn't going to do you any favors.  Do you agree with the predictions? Comment below and let us know what you think will happen with the mortgage and real estate market next year.

You can also read the original article here.

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