Housing market improvements expected through 2014

November, 2012

According to predictions recently made by real estate experts at the 2012 Realtors Conference and Expo, the housing market recovery is right around the corner, as the sector is expected to continue improving in the coming years.

The housing market is expected to improve, but only if there are no further limitations on the availability of mortgage credit or a fiscal cliff, which was discussed by officials at the conference.

"Existing-home sales, new-home sales and housing starts are all recording notable gains this year in contrast with suppressed activity in the previous four years, and all of the major home price measures are showing sustained increases," said Lawrence Yun, chief economist of the National Association of Realtors. "Disruption from Sandy likely will be temporary, notably in New Jersey and New York, but the market is likely to pick up speed within a few months with the need to build new homes in damaged areas."

Yun predicted that there wouldn't be any signs of inflation in 2013, but projects it to be between 4 and 6 percent by 2015.

Coupled with rising demand, there has been an ongoing decline in housing inventory, which Yun expects is leading to significantly higher home prices.

"Real estate will be a hedge against inflation, with values rising 15 percent cumulatively over the next three years, also meaning there will be fewer upside-down home owners," Yun said. "Today is a perfect opportunity for moderate-income renters to become successful home owners, but stringent mortgage credit conditions are holding them back."

The national median existing-home price is expected to increase by 6 percent to $176,000 for the remainder of 2012. The number is expected to increase another 5.1 percent next year to $185,200, which is comparable to the expected gains experienced in 2014.

Existing-home sales are also expected to increase by 9 percent to $4.64 million, which will be followed by an 8.7 percent increase to $5.05 million in 2013.

TransUnion also recently reported that national mortgage loan delinquency rates continued to decrease in the third quarter, possibly encouraging more first-time home buyers to pursue securing a new home since the housing market is showing signs of improvement.

* Here are your most common questions:

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