Home sellers and buyers listen up: Home sales & price gains are slowing
If you want to buy or sell a home this year, consider this: Mortgage rates are rising while home prices and home sales are increasing (but at a slower pace). In other words, 2014 won't be as good a year for housing as 2013 was.
The average rate on a 30-year fixed mortgage is now 4.46%, down slightly from the previous week but well above rates a year ago, making it more expensive to finance a home purchase.
(Click here to find mortgage rates in your area)
And unless something unusual happens that could affect Fed rate policy, 30-year mortgage rates will continue to rise and end the year near 5%, slowing sales and price appreciation, says Doug Duncan, chief economist of Fannie Mae.
The government-sponsored enterprise, which buys and packages mortgages into securities for investors, just released its housing outlook for 2014. Doug Duncan joined The Daily Ticker to talk about it, as you can see in the video above.
Related: 2014 housing outlook: Still a seller's market but better for buyers than 2013
Among Duncan's other forecasts:
• New home sales will increase 18%-20%
• Existing home sales will rise only about 2%
• Home prices will increase by about half the pace of 2013, which was near 13%
Related: Fannie Mae Didn’t Cause the Housing Crisis, Free-Market Ideologues Did, Former CFO Says
"The price rise in 2013 was all driven by supply side factors," says Duncan, explaining that prices rose because supply was limited. "More people now are not underwater so they can can more easily sell their properties," explains Duncan. In addition, he notes that institutional investors who were buying up big lots of homes "have now seemed to move off the scene now that rates have risen," which also increases the available supply of homes for sale.
Tells us what you think about the housing market outlook for 2014 in the comment section below.
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