We know you're bombarded with real estate market information from all directions—news, social media, friends, and even that chatty person at the PTA meeting. Talk about home prices and mortgage rates seems to be everywhere. But what does this all really mean, and how does it help you decide whether to buy now or wait?
Here are two crucial questions to ask yourself as you consider purchasing a home:
According to over 100 economists, real estate experts, and market strategists surveyed for the Home Price Expectation Survey by Pulsenomics, experts project a slight dip in home prices this year. We've already seen this happen in certain markets.
But here's the context you need: the worst price declines are likely already behind us, and many markets are starting to appreciate again. The once-predicted real estate market crash seems highly unlikely. So if some well-meaning person has advised you to wait for prices to plummet before you buy, you’ll want to think twice.
But looking ahead, the forecast is optimistic!
Prices are expected to appreciate in 2024 and beyond. This matters because if you buy in 2023, your home will likely increase in value, building equity for you. But remember, based on these forecasts, the cost of purchasing a home will only rise if you wait.
Over the past year, mortgage rates rose due to economic uncertainties and inflation. The good news is that inflation has shown signs of moderation. When inflation cools, mortgage rates usually respond by falling. That's why some experts predict a slight decrease in rates over the next few quarters.
Remember, predicting mortgage rates is tricky because there are many factors involved.
- Buy now and mortgage rates remain the same: You made a smart move since home prices are projected to rise. By buying now, you beat rising prices.
- Buy now and mortgage rates later drop (as projected): Still a good decision since you've secured the house before prices appreciate further. Plus, if rates fall, you can always refinance later.
- Buy now and mortgage rates rise: A great decision since you'd purchase before both home prices and mortgage rates increase.
While no one can predict the future with certainty, expert projections provide valuable insights. Of course, relying on a trusted mortgage professional who can offer expertise in your local market is an incredible asset. With the right guidance, you'll be well-equipped to make informed decisions and embark on an exciting homeownership journey.