Housing activity in the first quarter of 2014 was below par, according to information the National Association of Realtors gleaned from presentations at the Realtor Party Convention & Trade Expo May 12-17 in Washington, D.C.
Housing activity in the first quarter of 2014 was below par, according to information the National Association of Realtors gleaned from presentations at the Realtor Party Convention & Trade Expo May 12-17 in Washington, D.C.
While existing-home sales grew 9 percent to 5.1 million in 2013, activity boomeranged during the last six months and is projected to decline an additional 3 percent for the year to a little more than 4.9 million. The number should trend up to more than 5.2 million in 2015.
Meanwhile, home prices have increased because of tight inventories and rising sales last year. The median existing-home price rose 11.5 percent to $197,000 in 2013; it is expected to increase another 6 percent to $209,000 in 2014 and could reach $219,000 next year.
Also on the rise are mortgage interest rates. The pattern is uneven month-to-month, but the 30-year fixed rate is forecast to average 4.7 percent this year and 5.5 percent in 2015, inevitably hurting housing affordability, said NAR Chief Economist Lawrence Yun.
This spells trouble for new homeowners, particularly young adults. Three million more young adults lived with their parents in 2012 than in 2007, and student loan defaults grew from 6 percent in 2003 to about 12 percent a decade later. As many as one in 10 renters in their 20s may not qualify for a mortgage.
Still, presenters at the expo said it could be getting better.
The Joint Center for Housing Studies at Harvard University projects household growth to rival or top the annual average pace from 1995 to 2000. Fannie Mae predicted that about nine out of 10 people under the age of 45 expect to buy a house in the future. A Zelman & Associates consumer survey says the number of people under the age of 35 without debt is better than the historic average, and that there's no correlation between student loan debt and household formation.
