Many areas are reporting an improvement in the state of their housing market, and that means that more people are making the decision to buy or list their homes. In just six months the housing market has changed drastically. In this article we are going to offer you some insight on how the market has changed and what you can expect when selling or buying a new home.
One of the first things that you should be aware of is that homes have gone up in value. This can be attributed to the fact that the economy is improving and interest rates remain low. This has led many people to buy new homes, but it has also decreased the amount of available homes left for potential buyers to choose from. It is estimated that home prices will continue to rise over the next year, but the increases will not be drastic. The increases in home values will continue to climb but at a steady pace.
It is expected that interest rates will begin to rise in 2013. There is no way we can tell you exactly how much, but they will go up. In addition to the interest rates increasing this year, it will also be more expensive to secure a home loan. The FHA has recently increased the amount of down payment required for loans to 1.75% of the loan and they could go up again this year. The Federal housing Administration Fiscal Solvency Act of 2012 has given the FHA permission to raise premiums as high as 2.05% in order to maintain their reserves.
Another change that is occurring in the real estate market is that the inventory of existing homes has dropped. One of the main problems associated with this is that sellers aren’t selling because they believe they will not get what they believe their home is worth. This is expected to change sometime later this year as home values begin to rise. But as it stands right now, if a buyer sees a property that they are interested in, they shouldn’t wait to make an offer. There’s no guarantee that it will be there the next day or even later that same day.
In order to avoid another housing crisis, the Consumer Financial Protection Bureau has recently announced new guidelines that will ensure new buyers are actually able to afford the new home they purchase. The Ability to Repay rule is expected to go into effect later this year, and is designed to eliminate risky mortgages from causing the same kind of disaster that we are currently recovering from.
These are only a few of the many changes that can be expected in the real estate market this year. As the market changes and improves you can expect to see more changes occurring. If you stay current on the trends and rates you should be able to successfully buy or sell home in 2013.