Bankrate.com shares tips on what to expect in the housing market during the first quarter of 2014.
For those of us without a crystal ball tuned in to the housing market, it's tricky to know whether the time is right to buy, sell or rent a home. Luckily, Bankrate.com has some tips on what to expect heading into the first quarter of 2014.
Holden Lewis, Assistant Managing Editor, Bankrate.com:
"It continues to be a seller's market but it's not as extreme as it used to be, say nine or 12 months ago. So, it's not horrible to be a buyer, but you still have a little bit of strength if you're a seller."
Expect the cost of mortgages to rise. First, rates are expected to creep up as the Federal Reserve scales back its bond-purchasing stimulus program. Second, Fannie Mae and Freddie Mac are instituting higher mortgage fees. Although costs are going to rise, it will be gradual. For those looking to buy in the short term, you'll not only enjoy lower fees and rates than later in the year, you're also likely to find less competition, which means fewer bidding wars.
Some new rules are also coming into effect this quarter when it comes to loan sizes and lending standards.
"They have to do with things like the amount of money you can borrow with it still being a regular conforming loan instead of a jumbo loan. In about 650 counties, that limit from a jumbo to a conforming, it went down. So, essentially that means that there's more people who are going to have to get jumbo loans. That's not a real big deal right now, because jumbo mortgage rates are about the same as conforming. Historically, they may be a quarter of a percentage point higher. There's a lot of rules that require lenders to make sure you can repay that mortgage. And so, there's just going to be more hoops to jump through, starting this year."
For renters, the more expensive cost of homeownership is bad news. Many Americans may choose to rent instead of buy. The prices of rent is already far outpacing inflation and with more renters being pushed into the market, demand is continuing to grow, especially for single-family homes.
To learn more about this quarter's housing trends and to shop for the best mortgage rates in your area, visit Bankrate.com. I'm Lucas Wysocki.