What’s Next for Home Prices and Mortgage Rates?

If you're contemplating a move this year, two crucial factors are likely at the forefront of your mind: home prices and mortgage rates. You're probably wondering what the future holds and whether it's wise to make a move now or wait.

Making the best decision involves staying informed with the latest data. Here's what experts are predicting about both home prices and mortgage rates

What’s Next for Home Prices?

One reliable source for home price forecasts is the Home Price Expectations Survey from Fannie Mae, which gathers insights from over one hundred economists, real estate experts, and market strategists.

According to the latest survey, experts project that home prices will continue to rise at least through 2028. The rate of appreciation will vary year-to-year, but the consensus is clear: prices are expected to increase steadily for the next five years at a more normal pace than the recent rapid growth.(see the graph below)

What does this mean for you? If you buy now, your home's value is likely to appreciate, helping you build equity over time. Conversely, if you wait, the cost of purchasing a home could be higher later on, as prices continue to climb.

When Will Mortgage Rates Come Down?

Predicting mortgage rates is more complex. A variety of factors, including inflation and labor market data, influence rates, contributing to the current volatility. Odeta Kushi, Deputy Chief Economist at First American, explains:

“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.”

The future of mortgage rates hinges on the trajectory of these factors. While experts remain hopeful that rates might decrease later this year, economic indicators will continue to play a significant role. As noted in a 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.”

If you're in a position to buy now and can afford it, partnering with a trusted real estate advisor is crucial. They can help you navigate these variables and determine the best course of action based on your circumstances.

Bottom Line

Let's connect to ensure you have the latest information on home prices and mortgage rate expectations. Together, we'll review expert insights to help you make an informed decision about your move.

5-20-2024