When it comes to what's going on in the housing market, there's a lot of uncertainty right now. You may hear one thing in conversation, see something completely different on the news, then read something on social media that contradicts both of those beliefs. And, if you're thinking about making a move, you may have a lot of unanswered questions. This is where a reputable local real estate agent can help.
Here are the top three questions concerning today's housing market, as well as the facts to assist answer them.
1. What Will Happen to Mortgage Rates Next?
Mortgage rates are higher now than in previous years. And, if you want to purchase a house, this will affect how much you can pay. That's why so many purchasers want to know what mortgage rates will be like in the future. The truth is that no one knows for sure, but here's what we know based on previous tendencies.
Mortgage rates and inflation have a long history of being linked. In general, when inflation is strong, mortgage rates tend to rise. Mortgage rates have risen in tandem with inflation over the last year. However, inflation is currently dropping. And because the Federal Reserve has lately suspended its federal funds rate rises, many analysts predict mortgage rates will begin to come down
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In some respects, we've seen signals of somewhat lower mortgage rates in recent weeks. However, it has been volatile and will most likely remain so in the next year. Some continued volatility is to be expected, but we expect to observe a declining trend in 2024. According to Aziz Sunderji, Strategist at Home Economics:
“The bottom line is that interest rates are likely to be lower-perhaps even lower than many optimists think – in the weeks and months to come.”
2. What Is the Future of Home Prices?
While there was widespread worry that prices would plummet this year, facts demonstrate that this did not occur. In reality, property prices are growing across the country. Experts predict that tendency will continue, but at a slower rate that is more typical for the housing market - which is a positive thing.
Take a peek at Pulsenomics' Home Price Expectation Survey to see how sure experts are in this ongoing appreciation. It is based on a poll of over 100 economists, real estate professionals, investment and market strategists from throughout the country. As the graph below illustrates, the consensus is that prices will continue to rise in the coming year and years.
3. Is a Recession on the Horizon?
While recession rhetoric has been widespread in recent years, there is some encouraging news on that front.
The Wall Street Journal (WSJ) frequently surveys experts on this subject. And, at this time last year, the majority of them predicted a recession by now. However, when analysts examine all of the leading indications, they are altering their thoughts and stating that a recession is becoming less likely. According to the most recent data, more experts now believe we are not on the verge of another recession (see chart below):
strategists. As the graph below illustrates, the consensus is that prices will continue to rise in the coming year and years.
This is significant for the housing market. While the 48% to 52% split may appear close to half and half, the crucial point to remember is that the majority of these experts believe we've already escaped a recession.
In conclusion
What is the main takeaway? The data demonstrates that there is no need to be concerned; in fact, there are more indicators of hope. Contact a local real estate agent to discuss the housing market concerns you have as the new year approaches.
credit: keepingcurrentmatter
