Buyers Facing Higher House Asking Prices

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Even though the demand for housing and for housing finance fell considerably from the beginning of 2013 to the start of 2014, home sellers still ask for high prices. In fact, currently, the average asking price for a house is at its highest level since 2008. The major reason for this is the low inventory, which has not marked major improvement despite the recovery of the housing market.

In the beginning of April 2014, the median asking price for a house is $269,000. This is a five-year peak. The increase on an annual basis is 11%. The high asking prices correspond to low inventory, especially in the major metropolitan areas and the big cities. Even though the inventory has increased by 7% from April 2013 and is now just slightly above 700,000 in the 54 major metro areas, it is much lower than in 2010 when it hit 1,200,000 homes.

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The low inventory is primarily due to the fairly slow recovery of the housing market. Despite the fact that property prices are higher, they are far from the level of the housing market boom before 2007. As a result, many homeowners owe more to mortgage lenders than their property is worth and this will certainly result in loss in the case of house sale.

Another reason for the low inventory is that many homeowners refinanced when mortgage rates hit historically low levels in 2012 and 2013. These people are happy with their home loans and they do not want to move, especially given the fact that now interest rates are about 1% higher than they were the same time last year.

The slowdown in construction development has also played its negative role. As the demand for housing is currently not particularly high, the number of new projects remains low. This trend is expected to remain in 2014.

Overall, housing prices are projected to increase in 2014. The increase is expected to be around 4%.

Mailynne

Mailynne

Mailynne serves as a content strategist and writer for mortgage.info. She is ahighly task-oriented strategic planner and experienced writer. Over the past 10 years, Mailynne has managedcontent for both large corporations, non-profits and businesses. She specializes in managing digital marketing,branding and web development content. Mailynne has worked with a variety of local, national and international organizations.

Contact: mailynne@mortgage.info
Mailynne

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