What Does the Real Estate Marketplace Look Like in 2014?

by Dan Jensen

Last year brought stabilizing and "reasonable" increases over the year to the prices of homes throughout the USA. Looking ahead through the coming year, indications are for prices to rise more slowly in 2014 than they did in 2013, with new home construction to continue to grow as the prime market mover throughout the year.

There will be two very strong factors influencing the prices of homes for the coming year...

1.) Rising mortgage interest rates

2.) More homes coming onto the market

These two factors will work strongly together to chill the fervor of some, with the first element causing many buyers who have only been able to enter the home buying marketplace due to the exceptionally low interest rates making monthly payments manageable to have to back off and wait a bit.

The second factor will soften that blow to prospective buyers by keeping the growth in home prices soft through the year which continues to translate to "affordable" for many buyers.

New construction plays a very strong role also. Mid $200,000 priced pre-owned homes are having to compete for buyer attention with similarly priced New Homes, and many of the pre-owned homes are losing that battle. This element will certainly continue to impact pre-owned home sales and pricing for the coming year or more.

All in all, we're looking at slower changes, smaller increases, and more stability for the foreseeable future. These are all good things in many ways, although there's a ton of homeowners out there still fighting their way back to "above zero" equity. These homeowners would very much like to see a more robust housing market come into the picture, but clearly, NOBODY wants to see these more stable gains go the other way!