KCM™s Housing Predictions for 2014

KCM’s Housing Predictions for 2014 Posted: 02 Jan 2014 04:00 AM PST Making predictions in what is still a somewhat volatile housing market can be tricky. That being said, we are going to give you what we believe will be the five biggest headlines for housing in 2014. Home Sales Will Surge Many housing pundits are calling for home sales to do slightly better in 2014 than they did in 2013. To the contrary, we strongly believe that home sales will skyrocket with increases of 10-15% in 2014. Supply Will Struggle to Keep Up with Demand With a dramatic increase in demand, it will be up to real estate professionals and builders to make sure there is the necessary inventory to satisfy this demand. This will be a challenge for much of the year. Interest Rates Will Increase Significantly Most experts are calling for an increase in mortgage interest rates in 2014. However, we believe the increase will be more dramatic than is being projected. We believe rates will be closer to 6% than 5% by year’s end. And with that being said The Underwood Sales Group is here to help you today get the best rates and sell your home faster and for top dollar. Using the power of the Keller Williams Realty and #1 in agent count we are here to answer any questions or concerns. Please feel free to contact us at (888) 831-0736 anytime!

Congratulations Keller Williams Realty: We are #1! » KW Blog

Congratulations Keller Williams Realty: We are #1! » KW Blog.

RENT VS. BUY YOU MAKE THE CALL!

Buy or Rent: Which Makes More Sense Financially?     Every potential home buyer has to stop for at least a moment and consider this question. Today, we want to look at one of the many financial reasons to buy instead of rent: the housing expense moving forward. According to the latest Existing Home Sales Report from the National Association of Realtors, the median sales price of a home in the U.S. is $184,300. The mortgage payment (principal & interest) on that purchase would be $661.89 assuming a 20% down payment and a 3.5% mortgage interest rate. Currently, the median asking rent in the U.S. according to the Census Bureau is $717 a month. We realize that the two payments do not necessarily reflect the housing cost on a similar residence. However, that is not the point of the post. All we are saying is that the monthly housing expense on a median price home is $661.89 and the median rent is $717. We now want to discuss what will happen to these costs over time. The principal and interest portion of the mortgage payment is locked in for the next 30 years. We know real estate taxes may be included in the payment and will increase to some degree over that time. We also acknowledge that the homeowner will have occasion to spend money on repairs. They also receive many tax advantages as a homeowner. However, the actual monthly housing expense remains the same for the next 30 years. Now, let’s look at what happens to a rent payment. The best thing to do to predict the future is to study the past. Here is a graph of the median asking rent since 1988 based on Census Bureau data:   We believe rents will follow their historically pattern and increase dramatically over the next 30 years. Buyers have a choice: either lock in your housing expense or deal with the uncertainty of rental increases.