SEATTLE – Dec. 5, 2013 – Zillow is making four housing predictions for 2014, and has identified the markets it expects to be hot in the coming year.
• U.S. home values will increase by 3 percent.
• Mortgage rates will reach 5 percent by the end of the year.
• It will be easier for borrowers to get a mortgage in 2014.
• Homeownership rates will fall to their lowest point in nearly two decades.
2014’s hottest housing markets
Zillow says it combined data on unemployment rates, population growth and the Zillow Home Value Forecast to predict hot markets.
1. Salt Lake City
3. Austin, Texas
4. San Jose, Calif.
6. Raleigh, N.C.
7. Jacksonville, Fla.
8. San Diego
9. Portland, Ore.
“In 2013, home values rose rapidly – about 5 percent nationwide and more than 20 percent in some local markets,” says Dr. Stan Humphries, Zillow chief economist. “These gains, while beneficial in many ways, were also unsustainable and well above historic norms for healthy, balanced markets. This year, home value gains will slow down significantly because of higher mortgage rates, more expensive home prices, and more supply created by fewer underwater homeowners and more new construction.”
According to Erin Lantz, Zillow director of mortgages, higher interest rates will also make it easier for borrowers to get a mortgage. “Rising rates means lenders’ refinance business will dwindle, forcing them to compete for buyers by potentially loosening their lending standards,” she says.
However, homeownership rates are expected to fall below 65 percent for the first time since 1995.
© 2013 Florida Realtors®