After many years of challenges, the real estate market came back to life last year. It is expected that the rebound will progress in 2014, but the movement will be very slow. A lot of experts say that 2014 is a year for stabilization and continued growth favoring the housing market with the decreasing number of foreclosures, rising prices or homes and more activity seen in homeowners. But then, real estate still need to deal with headwinds since inventory is tight and the fact that lending standards remain tough.
Real Estate Tax Tips in 2014
In order to purchase a home in the current real estate market, you need excellent credit score or the ability to pay in full cash. According to experts, the average score for applicants who were denied is at 729. With this, it can be inferred that the average score accepted is at 720 or higher. It is not right to expect that the credit standards will ease up soon. This is the year where regulations meant for preventing risky mortgage products and borrowers from coming into the market takes place. These changes necessitate lenders to evaluate several factors such as employment status and debt-income ratio, assets and income very closely.
The Continued Hike in Home Prices
Apart from tight credits, rising home prices and interest rates may put off prospective buyers from buying properties in 2014. Take a look at the computed 30 year mortgage at 3.34% in 2013 that bounces to 4.48% the current year and is expected to increase further this year.
What about the luxury home market? Well, price gains are not that much of a bad news for those who wish to buy. However, first time buyers may lose hope though increasing prices may satisfy current owners whom are waiting for their homes to accumulate more value.
In the past years, first time home buyers serve as the driving force. But this year, the reverse is expected as the prices of houses rises and less mortgages becomes underwater. The degree of bounce the housing market is expected in 2014 also relies on construction. Builders are financially careful and deal with similar tight lending settings as buyers do. So, this year, it is expected that there will be a small increase in new homes out in there in the market. But then, if buyer demand hikes up, building of new homes should also follow.
This 2014, the gains in terms of demand as well as inventory will move in a slow pace. It was noted that the entire housing inventory fall during the months of October-November last year. Currently, unsold inventory is at 5% higher compared to last year and with this, it is predicted that the inventory will not speed up until 2015.
It is presumed that 2014 will be the period where the appreciation of home prices will pull back to sustainable levels. However, to be able to get through the current housing trends, ample research is needed. This may take time, but it is always better to be sure than regret later on.