May 29th, 2013
Housing prices are on the rise as mortgage rates remain low, increasing optimism in the real estate industry. The National Association of Realtors (NAR) projects that this trend will continue rapidly through next year.
“Double-digit price gains are within reach in 2013 because inventory is bounding near 13-year lows, but some relief to inventory will occur later this year,” NAR chief economist Lawrence Yun said.
The NAR projects that home prices will rise 8 percent in 2013, followed by an additional 5 percent increase in 2014. Price increases are due largely to steady gains in employment across the U.S. as more people become qualified and equipped to take on a mortgage.
Yun estimates that approximately 51 percent of current renters are financially qualified to buy a home. This is a huge gain from recent years when, in 2005, only 24 percent of renters were financially solvent enough to make the investment. That 51 percent means that right now, there are 8 million renters that have a high enough income to afford a home, and yet have not chosen to enter the market.
As construction begins again and home prices increase, it is likely that more first-time buyers will begin looking for houses and mortgages.