Home prices will rise 3-5% in 2014 according to economists at Zillow, Redfin, MSN Real Estate, and elsewhere like Fortunebuilders. This predicted increase, on top of the increases already seen in 2013, will pull many American homeowners out of the negative equity that has been plaguing individuals across the country. With housing equity rising from negative to positive the possibility of movement will increase for these home owners as well. The whole housing market is expected to shift as those who were once trapped by negative equity can begin to look around for new places to live.
Those seeking new homes should know that though mortgage rates are expected to increase slightly along with the home prices, they should not exceed the still low rate of approximately 5%. Mortgage lenders are already beginning to loosen their standards for giving loans. Competition is fierce among mortgage lenders for all the new buyers so stringent standards put in place over the last few years are eroding away. Individuals stepping into the growing housing market will have an array of homes to choose from as owners attempt to capitalize on increased prices and mortgages become easier to obtain.
As buyers tour potential new homes they should pay particular attention to the possibility of refurbishment. Even if the house is not a “fixer upper” most homes have at least a few details that that could use a bit of improvement. Easy and relatively cheap investments one may seek include refinishing the door, increasing storage space, updating appliances and professionally cleaning floors or investing in rugs. Each updated item can considerably increase the value of a home. Even slightly larger investments such as converting a den into an additional bedroom or improving general curb appeal through landscaping or a new coat of house paint should not be overlooked. As each home improvement is completed the value of the home and potentially the neighborhood increases.
Individuals who take advantage of such easy renovations can participate in what the industry calls “flipping.” A practice of many real estate companies as well as individuals, flipping is the process of buying, renovating, and selling a house over a relatively short period of time. Depending upon the renovations that have been made the now homeowners can quickly turn a large purchase into profit. A housing boom, like what may be beginning now in 2014, is a favorable time for those flipping their housing investment.