The housing market continued its recovery in 2013, and as we start 2014 many economists are predicting the recovery will continue. Consumer optimism across the country is improving which many economists believe will result in the housing market strengthening. A recent study by Trulia showed that 74% of Americans believe that owning a home was part of achieving their American Dream. 73% of young adults (18-34 year olds), also reported that homeownership is part of what they consider their American Dream, which is up from 65% from 2011.
Home prices will continue to rise in 2014, but economists anticipate that the pace will decrease over what we saw last year. Mortgage rates started the year on the rise, and are expected to continue to increase as a result of the strengthening economy. However, with home prices and mortgage rates expected to rise, owning a home will still be cheaper than renting. Home prices rose nationally by 12.1% year-over-year in 2013, and increased as much as 2 % in 10 out of the 100 largest metro areas in the country according to most current Trulia Price Monitor.
In 2013 the number of inventory homes was down considerably, but economists are expecting that to change in 2014. With home prices on the rise many homeowners are no longer under water on their mortgage, and it will encourage them to sell. New home construction is also up, which will also help relieve the issue of the decreased number of inventory homes for sale.
Investors played heavily in the 2013 housing market numbers, but 2014 is expected to be the year of repeat home buyers. As prices rise we will see investors dropping out of the market, and more repeat home buyers jumping in.
Zillow is predicting that in 2014 home prices will increase by 3%, mortgage rates will reach 5% by end of the year, obtaining a mortgage will be easier, and homeownership rates will fall to their lowest points in nearly two decades.
If you are looking to buy or sell a home in Crow Wing County in 2014, contact me today. My team and I enjoy helping folks like you find just the right spot to live your northern Minnesota Lake Country dream.