If you’re contemplating the idea of buying a home in the current year, chances are you’re closely monitoring the housing market. Your sources of information likely include various channels such as news outlets, social media, your real estate agent, discussions with friends and family, and more. The hot topics are likely revolving around home prices and mortgage rates.
Here are the primary two questions that should guide your decision-making process, along with pertinent data to help cut through the noise.
- What Direction Do I Anticipate Home Prices Taking? A reliable source for insights into home price forecasts is the Home Price Expectations Survey by Fannie Mae, which compiles opinions from over one hundred economists, real estate experts, and investment and market strategists.
As per the latest findings, these experts predict a continued rise in home prices, at least until 2028 (refer to the graph below):
The prospect of home prices rising, even if at a more moderate pace, is positive news not just for the overall market but for you as well. Buying now suggests that your home is likely to appreciate in value, allowing you to build home equity in the years ahead. Conversely, waiting, based on these forecasts, could mean the home will cost you more later on.
- Where Do I Predict Mortgage Rates Going? Over the past year, mortgage rates experienced an uptick due to economic uncertainties and inflation. However, there’s a positive development on the horizon for both the market and mortgage rates. With inflation stabilizing, mortgage rates typically respond by decreasing. Recent weeks have indeed witnessed this trend. Furthermore, with the Federal Reserve signaling a pause in their Federal Funds Rate increases and potential rate cuts in 2024, experts are increasingly optimistic about a decline in mortgage rates.
According to Danielle Hale, Chief Economist at Realtor.com:
“. . . mortgage rates will continue to ease in 2024 as inflation improves and Fed rate cuts get closer. . . . a key factor in starting to provide affordability relief to homebuyers.”
As noted by the National Association of Realtors (NAR):
“Mortgage rates likely have peaked and are now falling from their recent high of nearly 8%. . . . This likely will improve housing affordability and entice more home buyers to return to the market . . .”
While the future of mortgage rates is uncertain, recent trends and the Federal Reserve’s decisions signal optimism. Though some volatility may persist, affordability is expected to improve as rates continue to ease.
In Conclusion, if you’re in the contemplation phase of buying a home, understanding the projected trends in home prices and mortgage rates is crucial. While no one can provide absolute certainty about their future trajectory, staying informed with the latest information can empower you to make a well-informed decision.
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Benson & Mangold Agent so you can stay updated on current developments and comprehend why this is positive news for you.
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