2014 is already shaping up to be a rebound year in many ways. The housing market is on a particular upturn. But what’s the driving factor? Most economist are pointing towards the rise in employment.


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In December 2013, the Freddie Mac website released an article showing the jump in mortgage rates within the last year. According to the site, 30-year fixed rate mortgages jumped from 3.34 percent in December 2012 to 4.46 percent by 2013’s end; a significant jump.

In December 2012, a 15-year FRM was 2.67 percent. By the end of 2013, a 15-year FRM was 3.47 percent. Freddie Mac reasons that the cause of this upward trend is the fervor of new homes sales over the last couple of years and the expansion of the private jobs sector.

The Bureau of Labor Statistics under the U.S. Department of Labor published a news release called, “The Job Situation –November 2013.” In the release, the facts and figures of unemployment in America was broken down based on household surveys and non-farm payroll employment trends.

Unemployment was teetering close to 9 percent in 2011. By the end of November 2013, the Bureau of Labor Statistics reports unemployment is at 7 percent with non-farm payroll employment rising to 203,000. Most of all employment sectors except for the federal government experienced positive job growth in 2012.

Job growth has also spurred relocation. Many Americans have moved south towards Georgia, Texas, and even towards the Midwestern states of Illinois and Michigan for better opportunities. Housing prices are still relatively low in the South where job developments are high. Texas alone produced more than 200,000 jobs in 2013 while maintaining a median housing price of less than $200,000 in some of it’s larger cities.

Simultaneously, the housing market has been gaining momentum. Although, many people lost their homes when the housing bubble burst, others were able to swoop in on foreclosures and other prospects while mortgage rates were low and houses were undervalued. Furthermore, some buyers have had time to renovate their purchases and place them back on the market with a more aggressive listing price.

Most foreclosed properties have been sold and housing prices in American cities have risen significantly to accommodate the influx of wealthier individuals and foreign investors. Gentrification has also spurred growth in housing development.

It is important to note that fixed mortgage rates can fluctuate and these are not absolutes. What excites economists and bankers alike is that a rise in percentage is an indication that America is slowly raising out of its recession. More people working means more money spent on a variety of goods, including housing that has laid dormant for many years.

If trends stay positive, this could be a pivotal year for America’s housing market. Now six years post crash, supply is lower and demand is higher enabling rates to increase countrywide. If you are searching for employment or a new home, be sure to stay on top of the trends and follow the signs.

To find out how you can get the best mortgage rates, please visit our mortgage page.

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