OfflineExperts predict rising interest rates, and gains in home sales.
The Salt Lake Board of Realtors® hosted its annual Housing Forecast Breakfast on Friday, Jan. 31. Lawrence Yun, chief economist of the National Association of Realtors®, was the keynote speaker. Yun described the 2013 housing market as a remarkable year in terms of home sales and price increases. However, Yun noted that the Salt Lake and national markets ended on a "weak note" with sales falling in the fourth quarter.
"In the fourth quarter it appeared that someone turned off the switch," Yun said. "National pending contracts fell substantially, almost 10 percent from November...implying possibly that the first quarter closing activity could be on the soft side."
Yun added that housing refinances will collapse in the coming year as mortgage rates climb higher. He warned potential home buyers that the Federal Reserve is in a "tightening mode" and that mortgage interest rates will be inching higher for the rest of the year. "This time next year it could be 5.5 percent," Yun said.
The forecast included remarks by James Wood, director of the Bureau of Economic and Business Research. Wood predicted a return to "normalcy" for the Salt Lake housing market in 2014. He said single-family home sales would rise about 7 percent this year and that home prices could increase another 5 percent to 7 percent.
"Salt Lake County is up 15 percent in median home prices (2013)," Wood said. "Salt Lake County peaked at $250,000. We are now back to $245,000 in the single-family median sales price. In current dollars we are at 98 percent of the peak."
Although every state responds slightly different to the real estate market, this report is a good indicator of where the trends are heading and how interest rates will affect the overall market.
Trends in the Market report
Posted on: Tue, 02/11/2014 - 22:34
Trends in the Market report
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Rising consumer confidence may in turn support overall economic growth, according to Fannie Mae’s November 2012 National Housing Survey. As the market steadily recovers, consumer attitudes across various indicators demonstrate an increased hopefulness toward the nation’s future economic state.
The number of consumers who believe the economy is on the wrong track reached 50% for the first time since the survey’s inception, while those believing it is on the right track reached 44%.
Consumers who believe home prices will decline in the next 12 months increased four percentage points since October, representing 14% of participants.
On the other side of that is a one percentage point increase of those who think prices will rise, now at 37%, which the data notes ties the survey’s high in that particular category.
Of note is the lessening of the gap between buyers and sellers. Those thinking it is a good time to sell increased five percentage points to 23%, while buyers remained unchanged from October at 72%.
“On the housing front, attitudes about the current selling environment continue to improve, with a significant increase in those saying it would be a good time to sell,” said Doug Duncan, senior vice president and chief economist of Fannie Mae.
Additionally, the share of respondents who say their household income is significantly higher than it was 12 months ago climbed two points to 21%. Decreasing by the same margin, those that said the opposite reached 14% for November.
“This growing confidence in a housing recovery, in addition to other factors, may reinforce growing consumer optimism regarding the improving direction of the general economy,” said Duncan. joliva