Downgraded House Sales Forecast for 2014

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So far in 2014, the housing market has not been recovering at the pace at which economists predicted. The first quarter saw sluggish home sales and a considerable plunge in the mortgage applications for the purchase of a first home. The market data and the current situation forced economists to lower their house sales forecast for 2014.

Before the start of the year, it was expected that some 5.14 million homes will be sold in the United States in 2014. This would correspond to a slight increase from 2013 when 5.07 million homes were sold. After the end of the first quarter of 2014, analysts have lowered their forecast considerably. Now they expect the house sales for the whole of 2014 to be between 4.75 and 5 million units. Even if the number of sales reaches the predicted maximum, it will still be below the level of 2013 and way below the initially forecasted level for 2013.

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Even though the housing market experienced a slight improvement in March and April compared to February, the number of sales is still nearly 8% lower compared to the same time of 2013. While one of the major factors for the slowdown during the first quarter of 2014 was the severe weather, other more significant factors played a role and will continue to do so in the coming months and possibly years.

At present, many potential first-time home buyers are unable to enter the housing market due to the growing gap between home prices on one hand and income on the other. The higher rental rates, the larger down payments required by lenders and the stricter lending requirements all have a negative impact on potential buyers as well. This explains the great plunges in the applications for mortgages during the first quarter of 2014.

The institutional investors are currently setting the trends in the housing market and they are traditionally cautious in their activity. The number of sales to credit-dependant buyers is expected to fall even further.

Christian

Christian

Christian Calvin mortgage Christian is a contributing writer for Mortgage.info. He is a graduate from the University of Tennessee with a degree in Communications and a concentration in Broadcasting. Christian has served as vice-president for a privately-held company for more than 20 years. Additionally, he has also applied his writing and business knowledge to various websites with a focus on business and sports news . . . both of which are passions. Christian enjoys playing golf and spending time with his family and friends.

Contact: christian@mortgage.info
Christian

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