Top 4 Differences Between the Housing Market Trends for 2012 and 2013

After a bad phase in real estate, 2012 saw the housing scenario bouncing back to its feet. Although it was not completely normal, the trend showed a rise in housing prices. In comparison, what does 2013 hold for us? Will the upward trend of 2012 continue or will it fall back below normal? Read on to know the answers to these questions and compare the housing scenario of 2012 with 2013 –

Comparing Home Prices and Inventories – 2012 saw the home prices hitting the bottom with all major indexes showing the sales and asking prices moving up. So, the question now is will this upward trend continue? And will the increase in prices be enough for “for-sale inventory” to expand? The inventory has hit an all time low since 2010, falling as low as 43%. Housing oversupply brought about this decline but now the levels are below normal.

There are 2 main reasons why increase in housing prices will result in more inventory – The first of these is that increase in construction and secondly, the increase in home sales by homeowners.

Can we expect the price gains to continue?

Robo Settlement vs Mortgage Rules – When banks started foreclosing, 5 big bangs got together. Their motive? They wanted settlement of an investigation of illegal foreclosures and for this they paid nearly $25 billion. This was the Robo Settlement for compensations, funding modifications of loans and others. Although the settlement was a punishment for the banks that illegal foreclosure practices, the victimized consumers did not received much by way of compensation.

Compare it with the housing policy of 2013 that will try and prevent any housing crisis in the future. As a step towards prevention of housing crisis, the Consumer Financial Protection Bureau announced some modifications in the mortgage rules.

The new rules will determine those mortgages that fall beyond the borrower’s repayment capacity and would mean serious trouble for the lender. The rules aim to create a balance between the borrowers and lenders so that neither of them suffers.

Improving Vs Decreasing Home Affordability – 2012 saw a massive decrease in mortgage rates. As a result, it was cheaper to own a home than rent it. This fact was true for the most expensive markets like sunset islands Miami beach.

But, just one month into 2013, and the prices are already rising. The rise is so fast that home affordability is quickly getting out of question. As a result, rents are also increasing, as are the mortgage rates.

The result is that home owning is going to be out of reach. The property rates in the cheapest locality in 2013 are going to give stiff competition to the rates in the most expensive localities of 2012.

These are only a few of the comparisons. If you have been following real estate news, then you will find that foreclosure is not a big problem anymore. It is expected that housing policy is going to be customized according to the state.

Vijayraj Reddy
Vijayraj Reddy is founder & editor-in-chief of, a financial blog which helps people to earn money, invest money and save money. You can find him on Facebook & Twitter or send him email at [email protected]

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