Economists predict better paying jobs in the New Year, which could support the real estate market in St. Louis. According to an article by Mortgage Professional America (MPA), there are several housing trends for the New Year that may affect homebuyers and sellers. Analysts with Freddie Mac released their U.S. Economic and Housing Market Outlook report, which predicts the economy will grow at 3 percent. Other experts have said first-time homebuyers in St. Louis and around the country will have an easier time getting a foot in the door to a home they want to buy. That’s because Fannie Mae announced a program that allows home buyers to put down just 3 percent as a down payment as long as they pay PMI or private mortgage insurance. Real estate experts say mortgage rates are likely to rise as the Fed ends the “quantitative easing” program that injected money into the economy and kept the prime rate low.
Rising Interest Rates
With interest rates expected to go up, it’s the time to jump off the fence and buy a home in St. Louis. MPA reports the rates on a 30-year fixed rate mortgage are expected to climb up to 5 percent or higher within the next 12 months. Home buyers and sellers in St. Louis will be impacted by higher mortgage rates because it will affect borrowing costs and therefore, how much home a person can afford to buy.
Stabilizing Home Prices
Home prices in St. Louis and in many parts of the country should begin to plateau. Experts say annual house price gains will go from about 9 percent in 2013, 4.5 percent in 2014 to 3 percent in 2015. Still, homes will be considered affordable, just not “very affordable.”
Hammering Out New Construction Numbers
When it comes to new construction, the forecast for total housing starts is expected to be up 20 percent from a year ago. Total homes sales are anticipated to increase by 5 percent. In St. Louis homebuyers can find newly-built luxury condos with three bedrooms, three bathrooms and almost 3,000 square feet of living space. In nearby University City, MO, builders are constructing luxury homes with hardwood floors, crown molding, 9-foot ceilings and custom mill work for over half a million dollars.
At Waters & Associates Realty, we specialize in corporate relocation to St. Louis, home listings, leasing services andproperty management in St. Louis the and surrounding cities. We can help you find the perfect starter home or step-up home in the city or suburbs. For more information how you may be affected by rising mortgage rates and other housing issues in the New Year, please contact us.