When prompted further about how the rising mortgage rate will affect sales and the market, Yun responded, “Assuming nothing changes further, I believe it takes about 10 percent right off the top in terms of people who qualified this year versus the same people who would qualify next year. If need be, NAR will be pushing for new legislation to clarify what QM and QRM are so that we don’t get hit by that 10 percent.”
With the housing market is recovering for most Americans, homeowners will be more concerned than ever about their home values in 2014. Actual price increases for 2013 was 11 percent, which is now expected to be a six percent rise next year. The way to relieve home price pressure is for more inventory to come into the market, says Yun.
“We were surprised by how fast inventory would decline, but there was always a fresh set of inventory trickling in as it went out,” he says.
Overall in 2013, investor activity has been normal, but numbers slightly declined. Though, more small-time investors entered the market, staying one step ahead of the population, consistently punching numbers to see what transactions made the most sense for them. “If investors remain active, it implies that housing is a good buy,” says Yun.
Despite some cautionary areas, the real estate market has its beacons of potential. The industry may not be back to its best numbers yet, but we are still heading in the right direction and making our way down that road to recovery.
“We’ve had a decent year this year and next year will be roughly the same.”
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