The home sales market we’ve seen in 2013 is the home sales market we’re likely to see in 2014: Improving but not at a knock-your-socks-off pace
Why will the housing sector improve? Because job creation is forecasted to improve a bit (say 200,000 jobs per month instead of the average of 180,000 per month that we’ve seen nationally in 2013). That should be enough to allow many folks who’ve been held back by the recession to enter the housing market as first-time buyers and we’ll see re-entry by some who had to give up their homes during the downtime.
“It’s almost going to be like a tug of war next year. You have what appears to be a recovering economy, but at the same time you have the prospect of higher interest rates,” said Nicolas Retsinas, senior lecturer in real estate at Harvard Business School, as quoted in the attached MarketWatch.com piece. “Generally, when there is a tug of war between jobs and interest rates, jobs win.”
2013 saw price increases with mortgage rates going up only at the end of the year. Rates will continue that modest incline throughout 2014, shutting some people out of the market, but really relatively few compared to those who can buy homes because they have jobs. Buyers discouraged in 2013 by low inventory will have more to choose from in 2014 as new home construction rises and more home owners who have been waiting for price increases decide that now is the time to sell
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- 30-year-mortgage rate ticks up to 4.48% (marketwatch.com)
- Home-builder confidence highest in four months – Economic Report – MarketWatch (marketwatch.com)