Seattle will be one of the nation’s hottest housing markets next year, real estate website Zillow predicted Thursday and according to a Seattle PI article.
The Seattle-based company’s crystal ball also reported that:
1. Home values will rise nationwide by 3 percent in 2014.
This year’s gains of 5 percent nationwide and more than 20 percent in some markets “were also unsustainable and well above historic norms for healthy, balanced markets,” Zillow chief economist Stan Humphries said in the report. In 2014, he added, “home value gains will slow down significantly because of higher mortgage rates, more expensive home prices, and more supply created by fewer underwater homeowners and more new construction.”
“While this will make homes more expensive to finance – the monthly payment on a $200,000 loan will rise by roughly $160 – it’s important to remember that mortgage rates in the 5 percent range are still very low,” Erin Lantz, Zillow director of mortgages, said in the report. “Because affordability is still high in most areas relative to historical norms, rising rates won’t derail the housing recovery.”
3. Prospective borrowers will have an easier time getting mortgages.
“Rising rates means lenders’ refinance business will dwindle, forcing them to compete for buyers by potentially loosening their lending standards,” Lantz said.
4. Homeownership rates will fall below 65 percent for the first time since 1995.
“The housing bubble was fueled by easy lending standards and irrational expectations of home value appreciation, but it put a historically high number of American households – seven out of 10 – in a home, if only temporarily,” Humphries said. “That homeownership level proved unsustainable and during the housing recession and recovery the homeownership rate has floated back down to a more normal level.”