No one really knows what will happen but it is possible to get a decent idea of trends for 2014. For what it is worth, here is some prediction for 2014:
1: Fewer and Lower Fee Hikes
Before FHFA director Mel Watt took over from acting FHFA director Edward DeMarco, the Government Service Entities had planned to increase their fees in March of this year. DeMarco believed this move would allow smaller, private lenders the chance to take over more of the lending market and become more profitable. However new director Mel Watt opted to delay the fee hike until he is able to analyze the numbers and situation. This move was applauded by the president of National Association of Realtors (NAR) Steve Brown, who stated, “We are pleased that Director Watt has agreed to halt implementation of the increases and conduct a thorough evaluation of the proposed changes and their likely impact on mortgage credit availability”. It seems likely that Watt will delay the hikes indefinitely.
2: Rates of Five Percent or Higher
Analysts predicted be good news and bad news for mortgage shoppers in 2014, largely in the form of presently-low but rising interest rates. The good news is that is that homebuyers presently can get loans at rates near four percent, but there will likely be a “substantial increase” in those rates before the end of the year, warned the Mortgage Bankers Association (MBA). However, Fed interference in the markets could be good news for would-be homebuyers, at least temporarily, since new chair Janet Yellen appears to be dedicated, as was predecessor Ben Bernanke, to keeping interest rates low no matter the cost.
3: Home Prices to Stabilize
Most analysts expect home value growth to slow “considerably” over the next year and until 2018. Most experts say they expect appreciation rates to slow to roughly 4.3% across 2014, on average, eventually falling to 3.4% by 2018. Analysts, however have wide ranging estimates regarding home prices after 2018. Zillow Chief Economist Steve Humphries predicted that “The housing market has seen a period of unsustainable, breakneck appreciation, and some cooling off is both welcome and expected,” while others believe that we might get one more year of Humphries’ “breakneck appreciation” before it’s all over.
Paddy Deighan J.D. Ph.D
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