Climbing mortgage rates in 2013 corresponded with declines in home buying, and many experts believe that this a trend could continue in the coming year as interest rates adjust due to recent to shifts in the Federal Reserve’s stimulus effort.
A lot depends on interest rates, with the standard 30 year fixed rate being the base off of which analysts go when predicting real estate futures. When interest rates go up, even just a few tenths of a percentage point, demand goes down and the market becomes even direr.
Ellen Haberle, an economist at Redfin, the popular online real-estate firm, says ““Particularly if we see a pretty quick rise – maybe a half a percentage point to percentage point rise — it’ll make for some bumpy demand in 2014.”
Mortgage rates are still at historical lows, and the interest rate on U.S. Treasury 10 year notes is also going up, which could signal higher interest rates ahead (historically, the interest rate on such notes is a good forecaster for national trends in other markets such as real estate.)
These rising interest rates could continue to drag on the housing market, but could also encourage those people waiting on the fence to make a decision to buy, especially if a short sale can sweeten the deal with the bank, seller and buyer.
Overall, a rough housing market indicates good times for short sellers despite rumors that 2014 would see a decline – with several states extending forgiveness of tax debt when the federal guidelines remained murky with intent for 2014, the market may well be booming for short sellers in states that are favorable to sellers with upside down mortgages (like California, where the governor has made it much more agreeable for sellers).
For those who missed out on short selling their home in 2013, there is still hope! Find out if you are a good candidate for a short sale today, and start gathering your information – the day of the short sale is definitely not over and many thousands more can take advantage of the offers on the table and relieve themselves from burdensome debt.