Lower inventory = higher pricesUS News reports that the “supply of homes for sale across the nation has fallen 43 percent,” allowing sellers to raise prices and causing bidding wars among buyers. With pricing corrections underway, home inventories will need to expand again in 2013 to support the continuing recovery.
In Trulia’s “Housing in 2013: What’s In, What’s Out,” worry over home prices finding a bottom is so 2012 — in 2013, the hot topic is when will housing inventories bottom out?
Reparation replaced with preventionIf 2012 was the year of fixing what went wrong with the mortgage industry, 2013 is anticipated to be the year of implementing policy to ensure it never happens again. New mortgage rules are to be announced by the Consumer Financial Protection Bureau in January that are intended to motivate lenders to expand mortgage credit, while preventing a recurrence of the abundance of high-risk loans that precipitated the housing market crisis. Expanded credit is needed to expand the pool of hopeful buyers who qualify for mortgages.
Housing affordability begins to shrinkThe record low mortgage rates along with depressed home prices contributed to housing affordability being near all time highs. With 2013 expected to see mortgage rates rise, housing inventory levels drop and home prices increase, housing affordability next year may be a shrinking opportunity.
For more predictions about the housing market in 2013, check out these resources: