The U.S. real estate market made a robust comeback in 2013, surpassing expectations of many economists, as the combination of low inventories and historically low-interest rates caused home prices to rise and even helped fuel bidding wars in some markets, surpassing the expectations of many economists. While positive trends, such as increasing home values, are expected to continue into 2014, mortgage rates are also expected to rise in the coming year and could put a damper on home buyers’ abilities to afford new homes.
Looking back at some 2013 data can give us a hint of the year ahead:
1. Inventory Should Gradually Stabilize and Return to Traditional Seasonal Levels
2. More Homeowners Are Likely to Return to Positive Equity
3. Mortgage Rates Are Expected to Rise
4. Foreclosure Activity Is Expected to Slow
5. Further Declines in Home Affordability Are Expected