Reserve our moving trailer! Check Availability

Housing forecast for second half of 2013

Housing forecast for second half of 2013

The housing market has taken big strides toward recovery, but some wonder if rising prices could reinflate the recent bubble. According to Forbes reporter Morgan Brennan, that fear is not likely to materialize.

  • Home prices in April increased by 12 percent in 20 major U.S. metro areas, compared to the same time one year prior. While the double-digit jump might cause worry, Jed Kolko, chief economist of Trulia, says that prices are still well below levels seen during the bubble.
  • Inventory has been low over the past year, but recent numbers show a jump of 4 percent from May to June, compared to the 1 percent month-to-month growth seen in 2012. Errol Samuelson, president of Realtor.com, predicts that “inventory levels on a year-over-year basis will probably flatten out by the end of this year.” Of course, new home construction will play a critical role in expanding inventory and further boosting the economy. In the first half of 2013, about 100,000 construction jobs were added, contributing to the overall net gain of 1.2 million jobs, reports Freddie Mac.
  • Even though mortgage rates may rise steadily, housing affordability is still strong. According to Kolko, buying will still be cheaper than renting in some areas until rates hit 10.5 percent. According to Freddie Mac, rates could close out in 2013 at 4.6 or 4.7 percent.
  • Foreclosures are down, short sales are up, but the number of underwater buyers still dampens the overall housing recovery.┬áDaren Blomquist, vice president of RealtyTrac, an Irvine, Calif.-based foreclosure site, estimates that it may take two to three years before these homeowners regain equity.
The forecast for the second half of this year remains positive, in spite of gradually rising interest rates and lower than ideal levels of inventory in some regions of the U.S.