The New Year has begun and economists are reflecting on the trends of 2013 and discerning what it means for 2014. Overall there was growth in many economic sectors during the past year, particularly in the real estate market, which saw double-digit increases in average home prices and sales in year-over-year comparisons. But what does this mean for 2014?
In the real estate sector, economists predict that we will continue see growth in 2014, but not at the high rate that was observed last year. A steady growth is exactly what is to be expected and the best scenario. The slowing pace of real estate sales, as long as they continue to rise, show that the recovery is not just a trend that will result in another housing-bubble burst but the actual strengthening of the economy. With rising home prices, homeowners may now be able to afford the mortgage and may even put their homes for sale.
One of the reasons home sales are increasing is because employment is growing. With more household members being steadily employed, families are building up the confidence to invest in buying a home. Additionally, homeowners who may have lost income during the recession are now able to catch up with their payments and make negotiations with the banks.
It’s a slow transformation, but all of the gears in our economy are cranking up. The combination of all the moving parts will result in continued lowering foreclosure rates through 2014.