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| What is Zillow Saying? |
Predictions for next year's housing market is beginning with the close of calendar 2013. Svenja Gudell, Director of Economic Research at Zillow, has made some predictions for the US housing market in 2014.
Zillow expects the housing market to continue to recover, but at a slower pace.
Zillow predicts home values will increase by 3% in the US during 2014. Zillow expects the following factors to dampen the growth: 1) higher mortgage rates; 2) higher prices; 3) more supply-- from a) fewer underwater homeowners and b) new construction.
Mortgage rates are predicted to be higher, according to Zillow, due to a reduction in Federal Reserve bond purchasing. Zillow expects rates to exceed 5% in 2014; Mortgage Banker's Association reported the average 30-year fixed rate was 4.51% at the week ended November 29, 2013.
Somewhat offsetting the rising rates will be increased mortgage availability, according to Zillow. With a reduction in refinancing activity, Zillow believes lenders will supplement the lost business by competing for new buyers. Zillow's theory is this will spur looser lending standards.
Zillow also predicts as decrease in homeownership rates. The predicted weak labor market and continued foreclosures are predicted to displace homeowners, according to Zillow. As such, the company expects a continued high demand for rentals.
What do you think? Leave your comments here.
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