Home sales are projected to post some big gains in the next two years, according to Fannie Mae’s latest monthly economic outlook.
Fannie Mae economists predict that existing-home sales will rise by 10.5 percent this year and by 6.2 percent in 2014. “We expect home prices to firm further amid a durable housing recovery, continuing to boost household net worth, gradually diminishing the population of underwater borrowers, and reducing incentive for strategic defaults,” according to Fannie Mae’s report. Wow! A 10 percent gain means many home owners could potentially have equity. . . something many of us thought wouldn’t be possible for another few years.
There’s even more positive prediction regarding mortgage interest rate. Fannie Mae projects that mortgage rates will stay low by historical averages this year. The 30-year fixed-rate mortgage will rise from an average of 3.5 percent to an average of 4 percent during the final three months of 2013. The rate is expected to inch up a little further for the fourth quarter of 2014 to possibly a 4.5 percent average.
Why look at predictions? Good question. Looking ahead helps with decisions homeowners are faced with today. If you are one of the lucky homeowners that currently has equity, looking at the potential gains for the future might help you decide to list you home now so can move up to your dream home before the interest rates rise. Deciding if it’s the right time to sell or purchase always turn to your local Realtor for guidance. We are always happy to help.
Sheri Aguilar is the president of the Lodi Association of Realtors and can be reached at Sheri@YourLocalAOR.com.