The New Year is here! And people all over the country have made their New Year’s Resolutions to do such things as exercise more, lose 10 pounds, and…purchase a new home.
According to a recent Real Time Homebuyer Survey conducted by Redfin, a nationwide real estate company, more than 70% of potential buyers believe home prices in their neighborhood will increase in the next twelve months. As a result, a third of buyers are speeding up their plans to purchase a home. Another interesting statistic from the survey confirms that while a decreasing number of buyers cited “low home prices” as their reason for buying, an increasing number of buyers indicated rising prices as their motivation for buying now.
David Crowe, Chief Economist of the National Association of Home Builders (NAHB), predicts that existing homeowners who’ve been paralyzed for years by job insecurity and falling house prices, may finally be in the mood to purchase a new home. In fact, after a 20% increase in new home sales in 2012, NAHB is forecasting that new home sales will jump another 22% in 2013.
According to Rick Palacios, senior analyst with Burns Real Estate Consulting, housing is one of only a handful of U.S. industries looking at 20-30% growth over the next four to five years.
Barclays Capital recently put out a report forecasting that home prices, which fell dramatically after the bubble burst in 2007, could be back to peak levels as soon as 2015! “In our view, the housing market has undergone a dramatic over-correction during the prior five years, resulting in pent-up demand for housing purchases that would spark a rapid rise in housing starts,” said Stephen Kim, an analyst with Barclays.
“A turn in the housing market is occurring now and it should become a boom by 2015. It will be powerful enough…to lift the entire U.S. economy,” said Roger Altman, Chairman of Evercore Partners and a former Deputy Treasury Secretary, in a column for the Financial Times.
“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 Doug Duncan, Fannie Mae’s Chief Economist.
While many experts are bullish on home sales, they are NOT so optimistic about any loosening of mortgage underwriting standards. In fact, with the Consumer Financial Protection Bureau’s (CFPB) decision on defining a “Qualified Mortgage” nearing completion, experts expect strict guidelines to continue – or even become more rigid.
With the market improving and with home prices and interest rates expected to rise, how should homebuyers prepare in order to ensure a successful purchase?
Put your trust in this seasoned and Certified Mortgage Planning Specialist with a proven track record. Contact me NOW, before you start searching for a new home! Only then can you ensure your transaction goes smoothly, your mortgage complements your financial plans, and that you’ll enjoy your new home for years to come.
Warren Goldberg is a Certified Mortgage Planning Specialist and a published author. His interviews include Blog-Talk Radio, Newsday, and the Long Island Herald. Since 1992, he’s been sharing his financial knowledge and wealth-building strategies, including how to properly use your mortgage as a financial tool. His clients regularly express their trust and appreciation by recommending friends and family call when in need of mortgage, real estate, and financial guidance.