While no one knows the future for certain, the current trends are tracking in a very positive direction. The overall economy saw significant growth in 2013, a momentum that helped lift the housing market out of the doldrums of previous years. As we turn the calendar, many are asking: What can we expect for 2014?
The Interest Rate Shift
Historically, as the economy grows, interest rates tend to follow. We have already observed a slow but steady rise in interest rates in recent months. I expect this trend to continue into 2014, though likely not to any extreme degree. We may see typical 30-year fixed rates move into the 5.5% range, which remains a very attractive and affordable rate for most buyers compared to historical averages.
Steady Home Appreciation
Regarding home prices, our local market appears poised for continued, sustainable growth. I anticipate a slow and steady increase in home prices, likely in the 3% to 5% range. This represents a healthy "normalization" of the market after the volatility of the past few years.
What This Means for You
-
For Buyers: If you have been sitting on the sidelines, now is the time to make your move. With both prices and interest rates expected to rise throughout the year, acting sooner rather than later preserves your purchasing power.
-
For Sellers: A rising market generally represents a better opportunity to sell. As prices increase and more buyers enter the market with confidence, your home becomes a more valuable asset.
In any event, I want to wish all of you and your loved ones a healthy, happy, and prosperous New Year. We look forward to helping you navigate the exciting opportunities in the 2014 market!
