Considering Purchasing A Home? Ask Yourself These Questions
Contemplating the purchase of a home this year likely means you're closely monitoring the housing market. Gathering information from various sources such as the news, social media, your real estate agent, and conversations with friends and family has become routine. The discussions often revolve around home prices and mortgage rates. Here are the key questions to consider and the relevant data to cut through the noise:
1. Where Do I Anticipate Home Prices Are Going?
For reliable insights into home price forecasts, consult the Home Price Expectations Survey by Fannie Mae. This survey aggregates opinions from over a hundred economists, real estate experts, and market strategists. According to the latest release, the consensus is that home prices will continue to rise at least until 2028 (see graph below).
While the rate of appreciation may not be as steep as in recent years, the crucial takeaway is the projection of rising prices for the next five years. This suggests that buying now could result in your home gaining value and accruing home equity over time. Waiting may mean a higher cost for the same property in the future.
2. Where Do I Think Mortgage Rates Are Headed?
Over the past year, mortgage rates experienced fluctuations due to economic uncertainty and inflation. However, there's an optimistic sign for the market and mortgage rates. As inflation moderates, mortgage rates generally tend to decrease. Recent weeks have witnessed a decline in rates, and with the Federal Reserve signaling a pause in rate increases and potential cuts in 2024, there's growing confidence that mortgage rates will continue to ease. This is particularly significant for potential homebuyers, as lower rates can enhance affordability. While predicting future mortgage rates isn't absolute, the recent decline and the Federal Reserve's decision indicate a positive trend. Although some volatility may persist, improving affordability is expected as rates continue to ease.
When contemplating a home purchase, staying informed about anticipated home prices and mortgage rates is crucial. While certainty about future trends is elusive, having the latest information empowers you to make an informed decision. Connect with us to stay updated on market dynamics, ensuring you are well-positioned to leverage the favorable news for your benefit.