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Th e M Rep o RT | 39 O r i g i nat i O n s e r v i c i n g a na ly t i c s s e c O n da r y m a r k e t ORIGINATION the latest ORIGINATION the year of the repeat Buyer awaits As investors pull out, someone has to fill the gap. a s prices continue rising in the new year—albeit at a slower pace—inves- tors will begin to ease back from the purchase market, but repeat homebuyers will be there to pick up the slack, accord- ing to Trulia's predictions for the housing market in 2014. "2013 was the year of the in- vestor, but 2014 will be the year of the repeat home buyer," said Jed Kolko, chief economist at Trulia, in his 2014 predictions. Other changes to the market in the new year include lower affordability, "less frenzied" home-buying, and a shift in the rental market from single-family homes to urban apartments, ac- cording to Kolko. While first-time buyers continue to face major hurdles to purchasing a home, repeat buyers will have an easier time, especially those who have equity in their current homes. The biggest obstacle for poten- tial homebuyers is saving enough money for a down payment, according to Trulia. This hurdle was the most commonly cited challenge in a Trulia survey of current renters wishing to own their own home. Fifty-five percent of survey respondents cited this obstacle, and among young adults (ages 18 to 34), the rate was even higher at 58 percent. The second-most common bar- rier to homeownership is lack of stable employment, cited among 36 percent of all survey respondents and 43 percent of young adults. However, repeat buyers may be in a better position to pur- chase, and "they're less discour- aged by rising prices than either investors or first-time buyers because the home they already own has also risen in value," ac- cording to Kolko. The pace of home price ap- preciation will slow this year, but rising prices, combined with rising mortgage rates, will take a toll on affordability. "Nonetheless, buying will re- main cheaper than renting," Kolko said, referencing a Trulia report from September, which deter- mined buying is 35 percent less expensive than renting nationally. "However, prices and mort- gage rates might rise enough to tip the math in favor of renting in a couple of housing markets," Kolko said. Continued price increases will likely lead more homeowners to list their homes for sale, lead- ing to an increase in inventory in 2014, according to Trulia. Inventory will also get a small boost from new construction. At the same time, tradi- tional homebuyers will face less competition from investors, and mortgages "should be easier to get" as the new regulatory environment takes shape, removing the uncer- tainty that has made lenders wary. Together, these factors will make the home-buying process "less frenzied" in 2014, according to Kolko. Lastly, Kolko predicts the rental market will shift from its recent heavy focus on single- family homes back to urban apartments. During the recession, single- family home rentals increased 32 percent, but several factors will lead to a decline in this trend during 2014, according to Kolko. Fewer foreclosures, fewer investor purchases, and loosening credit standards will all contrib- ute to the decline. Also, "[u]rban apartments will be the first stop for many of the young adults who find jobs and move out of their parents' homes," according to Kolko.