Experts Forecast US Housing Market
A May 17 Midyear Housing and Economic Outlook by National Association of Realtors (NAR) Chief Economist Lawrence Yun predicts increased home sales, home prices, and mortgage rates in 2013. On the fence about buying your new Park City home? Get off the fence and make your purchase now. Home prices will continue to increase through 2013; and Yun predicts a slight increase in interest rates in the early part of 2014.
Yun’s Annual Forecast is positive overall through 2013. Here are a few of the high points homebuyers and home sellers have to look forward to. Your new Park City condo or your next Park City vacation home could cost you more if you put off purchasing.
- Existing home sales. In 2011 existing home sales totaled 4.26 million. Yun is projecting a total of 4.6 to 4.7 million homes sold in 2012 (an 8 to 10 percent increase). Through 2013, Yun projects existing home sales of 4.7 to 4.8 million (a 10 to 13 percent increase over 2011 sales). The economist predicts slightly higher interest rates that could actually help the housing market. “Modestly higher rates could help home sales as banks re-staff mortgage work for home purchase applications and less refinance applications,” Yun said.
- New home sales. In 2011 a total of 304,000 homes sold throughout the nation. Yun predicts new home sales of 400,000 in 2012 and 530,000 in 2013.
- Housing starts. This sector represents the number of privately owned new houses (or housing units) on which construction has started in a certain period of time. In 2011 there were 610,000 housing starts. Yun predicts 770,000 new starts in 2012 and 970,000 in 2013.
- Existing home prices. As demand increases, prices will too. In 2011 housing prices averaged $166,100. Yun expects that to increase to $168,100 in 2012. Through 2013 he predicts the average home price to increase to $173,100.
- Gross domestic product (GDP) growth. In 2011 Americans saw an encouraging increase of 1.8 percent over the previous year in GDP. Yun predicts 2.4 percent growth in 2012 and 3.1 percent growth in 2013.
- Payroll job gains. This year payroll jobs gains are expected to grow from a gain of 1.7 million in 2011 to 2.2 million in 2012 and 2.5 million in 2013.
- Fed funds rate: The federal funds rate will remain at .1 percent throughout 2013.
- 30-year mortgage rate: In 2011 the average mortgage rate was 4.7 percent. The average is expected to fall in at 4.2 percent in 2012 then leap to 4.8 percent through 2013.
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