Considering a Home Purchase? Key Questions to Ponder

Considering a Home Purchase? Key Questions to Ponder
Considering a Home Purchase? Key Questions to Ponder

As you contemplate buying a home this year, you're likely keeping a close eye on the housing market. Your sources are varied: news reports, social media, insights from your real estate agent, and conversations with friends and family. Topics like home prices and mortgage rates are probably at the forefront of these discussions.

Here are two essential questions to consider as you navigate your decision, along with pertinent data to help sift through the myriad of information.

1. What Are My Predictions for Home Prices?

A credible source for home price forecasts is the Home Price Expectations Survey from Fannie Mae, which compiles views from over a hundred economists, real estate experts, and investment and market strategists.

The latest survey indicates that experts anticipate home prices will continue to rise at least through 2028 (refer to the graph below):

The latest survey indicates that experts anticipate home prices will continue to rise at least through 2028

This is significant for you because, although the rate of appreciation might not match recent years, the key takeaway is the expectation of rising, not falling, prices for at least the next five years.

Rising home prices, even at a steadier pace, are beneficial not just for the market, but for you as a buyer. Purchasing now means your property is likely to appreciate in value, building home equity over time. Conversely, waiting could mean facing higher costs later, according to these forecasts.

2. What Are My Expectations for Mortgage Rates?

Mortgage rates have seen a sharp increase over the past year due to economic uncertainties and inflation. However, there's a silver lining. As inflation begins to stabilize, mortgage rates are showing signs of decline. The Federal Reserve's recent indications of pausing or even reducing Federal Funds Rate increases in 2024 have bolstered confidence that mortgage rates may decrease further.

Danielle Hale, Chief Economist at Realtor.com, notes:

"...we expect mortgage rates to continue easing in 2024 as inflation improves and the possibility of Fed rate cuts draws nearer... This is a key factor in providing affordability relief to homebuyers."

The National Association of Realtors (NAR) echoes this sentiment:

"Mortgage rates, having peaked and now receding from their recent high of nearly 8%, are likely to enhance housing affordability and attract more buyers back into the market..."

While it's impossible to predict mortgage rates with absolute certainty, the recent downturn and the Federal Reserve's latest stance suggest a more hopeful outlook. Despite potential fluctuations, overall affordability is expected to improve as rates continue to moderate.

**Bottom Line**

When considering a home purchase, staying informed about home prices and mortgage rates is crucial. While predictions are never guaranteed, having the latest information can aid in making a well-informed decision. Let's connect to keep you updated on the latest developments and discuss why this is promising news for prospective buyers like you.

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