NY Times real estate trends for 2014

 Karnak says, "real estate is a puzzle."  The question, what will 2014 bring?  The NY Times tries to answer that question, too.

The coming year is expected to be a little kinder to home buyers. While affordability will continue to be a problem in hot markets like New York and San Francisco, buyers in general may find they have more homes to choose from and more lenders vying for their business.

MORTGAGE RATES CONTINUE TO CLIMB. As the economy improves and the Federal Reserve winds down its monetary stimulus, mortgage rates will rise to reflect that lack of stimulus...

But rates will continue to be low and the sign of a stronger economy.

LENDERS LOOSEN UP, A LITTLE. Rising rates will also mean fewer borrowers seeking to refinance out of higher-priced mortgages. Lenders will try to fill that gap in capacity by competing more aggressively for purchase business. 

What will down payment requirements be?  How about credit scores?

Regulatory guidelines that take effect in January will set parameters on how much easing lenders can do without straying outside the government’s “qualified mortgage.” Lending outside that safe harbor isn’t likely to be liberal, and will mainly consist of low-risk loans to the wealthy...

HOMEOWNERSHIP RATES FLATTEN OR FALL. It may seem counterintuitive that the level of homeownership would be unresponsive to improving market conditions. But the national rate is only just stabilizing — at around 65 percent — after dipping from the historically highs during the housing bubble.

 And those young adults who, because of a stronger economy, are finally able to find jobs and move out of their parents’ homes are more likely to rent than buy.

ARMS, CASH-OUT ‘REFIS’ MAKE A COMEBACK. Adjustable-rate mortgages, or ARMs, were viewed as risky after the housing-market collapse. But they are slowly regaining their appeal, and as rates on fixed-rate mortgages rise, more borrowers will take advantage of lower-rate adjustables.[See our earlier post on ARMS.]

Cash-out refinancing was also abandoned after the collapse emptied borrowers of equity [but] interest rates will still be low enough to make cash-out refinancing an option for many people. 

Only time will tell, and that time is just a few weeks away.  Read the full report.

For your next commercial real estate transaction, house purchase, mortgage refinance, reverse mortgage, or home equity loan, contact us. We can help. Located in Fairfield, NJ, we are the title insurance agent that does it all for you.

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