The real estate industry saw improvements in 2013, with price appreciation and continued sales. However, 2014 is expected to bring higher interest rates, which will lead to fewer potential buyers.
According to a survey by Redfin real estate agents in December 2013, only 65% of agents said 2014 will be a good time to put a house on the market. In comparison, 72% of agents who were asked the same question between July 2013 and September 2013 and 86% of agents asked during the second quarter of 2013 said it was a good time to sell.
Home values are continuing to rise. The national median existing-home price for all houses was $196,300 in November 2013, up 9.4% from November 2012, according to The National Association of Realtors (NAR). Sales were down two months ago and one implication may be the result of rising interest rates.
According to Trulia, an online real estate marketing website, the increase in home values and rising interest rates is expected to negatively affect housing affordability, which will slow demand. This may result in more rentals within the housing market in 2014, with many young adults renting apartments in urban areas rather than purchasing single-family homes.