What’s the U.S. Real Estate Market Doing Now?

 Across the board home prices continue to rise, mortgage rates increase, and big changes are on the horizon for the mortgage industry come 2014.

More rules and restrictions will be in effect starting January 10 and more to come towards the end of 2014. Lower limits on obtainable mortgages, harder challenges for self-employed borrowers, and lower limits for debt to income ratios are all on the horizon for this next year. Anyone looking to close within the next month should do so before January 10 because the new rulings include lenders must prove borrowers ability to repay a loan by meeting several strenuous guidelines.

Across the country home prices continue to decline at 12.8% higher than they were in September. According to CNN  Money, “home prices posted the largest annual gain since housing bubble days in August, although the month over month gain slowed for the fourth straight month.”

As mortgage rates have increased  at a rate of 1.3% since July, buyers have been a little bit more hesitant at jumping on the real estate bandwagon. However, the recovery in housing market continues to be strong and there are fewer foreclosures which have weighed down all of the prices. A strong drop in unemployment rates are also helping to support the housing recovery. The steady climb and  consistent methods used by mortgage brokers and the government all work together to avoid the chance of another bubble in home prices. According to Stan Humphries, chief economist at Zillow.com, “it’s good to see the pace of home value appreciation moderate, allowing the market to get back into a more sustainable balance and not topple over. Home value appreciation is better when it’s boring, and we expect to see continued moderation.”

Even though the market is increasing home prices are about 20% below the July 2006 peak. This is generally speaking however since Dallas and Denver hit record highs and places like Boston and Charlotte are now less than 10% below their peak prices.

All in all, for buyers, it’s best to get a home loan now, close before January 10, and to get the best deal and rates that you can before an uncertain 2014 hits. Sellers may find themselves negotiating for lower prices this time of the year but closing before January 10 may still be a good option to move on.