Fred Northaft, chief economist at Freddie Mac, has offered his predictions for the 2013 housing market trends, and all of us here in Northern Virginia can look forward to a market whose future appears to be even brighter than what we had in 2012. According to Realty Times, Northaft recently stated that “the housing market is healing, is contributing positively to the GDP and is returning to its traditional role of supporting the economic recovery.”
More specifically, in 2013 we can look forward to continued low mortgage interest rates. In 2012, rates fell to a 65-year low, and the Federal Reserve announced its plans to continue its efforts to keep them low. Northaft does expect a slight increase in the second half of next year, but other economists seem to think they’ll remain steady. Ironically, this will go hand-in-hand with a fall in refinance rates – many homeowners have already locked in rates that are just about as low as they can go.
Property values will continue to strengthen in 2013. All of the major house price indexes posted gains during 2012 – Freddie Mac’s was up 4.3%. Northaft is confident this trend will continue with property values continuing to strengthen perhaps by as much as 2-3%, or even more in select markets.
The rate of homeownership will increase reversing the trend in recent years. As the job market improves, and incomes rise, we could see a net growth of 1.2 to 1.25 million households next year. That in turn will push housing starts upwards, and vacancy rates downwards.
More new households forming than there are new homes being built means that vacancy rates will fall. This is likely to hold true for both the rental market as well as the single family for sale market. This will be a continuation of a three-year trend as the creation of new households has outpaced the rate of newly built homes.
It seems that 2013 holds great promise for the real estate market here in Northern Virginia, and the best way to take advantage of this opportunity is to enlist the services of a real estate professional. All of us here at The Sullivan Group are ready to help you make the most of what the coming year holds in store. Call our office today at 703-222-3300 or contact me directly by email or by phone at 70-268-6380.
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