If you’re thinking about moving this year, two factors can affect the housing market: home prices and mortgage rates. What do you think will happen next? Should I make a move now or wait a little longer?
All you can really do is make the best decision based on the latest information available. Here’s what the experts say about prices and rates.
1. What will the house price be?
A trusted source for home price forecasts is Fannie Mae’s Home Price Expectations Survey, a survey of more than 100 economists, real estate analysts, and investment and market strategists.
According to a recent publication, experts predict that home prices will continue to rise until at least 2028 (see chart below).
Although the pace of price growth varies from year to year, the study suggests that prices will rise (rather than fall) at a more moderate pace for at least the next five years.
What does this mean for your movement? If you buy now, your home will likely grow in value and you should gain equity in the years ahead. But, based on these forecasts, if you wait and prices continue to climb, the price of a home will only be higher later on.
2. When will mortgage interest rates fall?
This is the million dollar question in the industry. And there is no easy way to answer this question. Finally, there are a number of factors that contribute to the volatile mortgage rate environment we find ourselves in. Odeta Kushi, Chief Economist at First American:
“Every month brings a new set of inflation and labor data that can influence the direction of mortgage rates. Ongoing inflation deceleration, a slowing economy and even geopolitical uncertainty can contribute to lower mortgage rates. On the other hand, data that signals upside risk to inflation may result in higher rates.”
What happens next depends on where each of these factors is headed. Analysts are optimistic that interest rates will continue to fall this year, but acknowledge that changes in economic indicators will have an impact. According to the CNET article:
“Though mortgage rates could still go down later in the year, housing market predictions change regularly in response to economic data, geopolitical events and more.”
