What’s Ahead for 2014 Housing Market

The housing rebound was hitting on all cylinders last year with larger-than-anticipated price gains and solid home sales. However, 2014 likely will not be as prolific due to rising mortgage interest and price appreciation that is steady but limited to the single digits. Experts expect prices to rise more slowly as more residences come onto the market, investors snap up fewer homes, and higher ownership costs curtail affordability. Home resales have already begun to brake; but observers say property prices and housing starts continue to improve, which will help keep the recovery on track. The outlook for the new-homes market, meanwhile, calls for fewer bidding wars and a less frantic environment. Home building, which has been trailing its usual pace, still will not return to normalcy in 2014; but the gains made in this area will effectively drive housing recovery as price appreciation slows. Finally, watchers say home buyers should expect to pay 5.5 percent in mortgage interest by the end of this year. The higher cost of borrowing, along with tighter mortgage rules taking effect this month, probably will eliminate some from the pool of prospective buyers or force them to purchase a lower-priced home than they could have afforded in 2013. “People have gotten spoiled,” according to Brian Koss of Mortgage Network. | Read More