Rising Rents will Improve House Sales

By Stevie Duffin Updated on 9/25/2013

Housing rental market might actually cause home sales to turn out brighter than projected this spring according to the economists at the MBA (Mortgage Bankers Association).

There is data that supports the fact that apartment owners have raised their rates causing fewer people, about only 60%, who have plans to actually renew their rental.  This is based on a survey by Kingsley Associates.

This could mean better numbers in spring for home sales. There is projection of 4.39 million single-family homes sold in the second quarter.  This is a bump from the seasonally adjusted 4.17 million in 2011.

During the housing meltdown, many began renting after getting out of their homes becuase of being upside down or becuase they were being foreclosed on.  This pushed homeownership to a 14-year low, and more tenants elected to stay put.  This is all about to change with the increases in rent.  There is also good news on the refinance side.  With the new Obama HARP 2 Refinance, more people can actually refinance their home and stay in their homes instead of moving out and renting.

The MBA projects mortgage originations in 2012 to be just more than $1 trillion with more refinances than initially expected. That's still below 2011 levels and would be the lowest since 1997. Home sales are to grow 10% in 2013 while refinances will drop off as interest rates rise from the lowest levels in 40 years.