In a new statement by the National Association of Realtors® (NAR), the severe weather was blamed for the slump at the start of the year nationally, but an uptrend is expected with healthy underlying demand over the balance of the year and through 2015.
Words of wisdom from NAR chief economist Lawrence Yun explained that the slow and steady job creation compared to the leaps in population have caused the markets to remain weaker. That’s why “Main Street America does not fully feel the recovery.” Yun explained more at the Realtor® Party Convention & Trade Expo.
Pent-up demand is helping the market to rise, though inventory constraints and tight credit conditions continue to impede the market. These factors, in combination with rising home prices and higher mortgage interest rates, mean that the growth is present but limited – and will likely continue in this fashion throughout the rest of the year and into 2015. Still, it’s important to remember that slow and steady wins the race.
Another upside of rising prices is an increase in home equity. While it may not be a boom back to pre-recession numbers, last year, the median existing-home price rose 11.5 percent to just over $197,000. Home price growth is likely to continue to change as more new homes are constructed, with the median price increasing about six percent in 2014 to $209,000 and reaching nearly $219,000 next year as market conditions begin to balance.
You can read more about Chief Economist Yun’s expectations for 2014 for Chicago real estate and beyond at www.realtor.org.