Are the Top 3 Housing Market Concerns on Your Mind?
When it comes to what is going on in the housing market, there is a lot of uncertainty right now. You may hear one thing in conversation, see something completely different on the news, and read something on social media that contradicts both of those thoughts. And, if you are 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 3 questions people are asking about today’s housing market, and the data to help answer them.
1. What’s Next for Mortgage Rates?
Mortgage rates are currently higher than in previous years. And, if you want to buy a house, this will influence how much you can afford. That is why so many buyers want to know what future mortgage rates will be. The answer to that question is: no one can say for certain, but here’s what we know based on historical trends.
Mortgage rates and inflation have a long history of being linked. In general, when inflation is high, mortgage rates tend to rise. Mortgage rates have risen in tandem with inflation over the past year. However, inflation is currently easing. And it is for this reason that the Federal Reserve has recently paused its federal funds rate hikes, leading many experts to believe that mortgage rates will begin to fall.
And in some ways, we’ve started to see hints of slightly lower mortgage rates in recent weeks. But it’s certainly been volatile and will likely continue to be that way going into next year. Some ongoing variation is to be expected, but the anticipation is, that in 2024, we’ll see a downward trend. As Aziz Sunderji, Strategist at Home Economics, says:
“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. Where Are Home Prices Headed?
While there was widespread concern that prices would plummet this year, data show that this did not occur. In fact, most of the country's home prices are rising. According to experts, this trend will continue, albeit at a slower pace that is more typical for the housing market - which is a good thing.
To help show just how confident experts are in this continued appreciation, take a look at the Home Price Expectation Survey from Pulsenomics. It’s a survey of a national panel of over 100 economists, real estate experts, and investment and market strategists. As the graph below shows, the consensus is, that prices will keep climbing next year, and in the years to come.
3. Is a Recession Around the Corner?
While recession talk has been a common thing over the past few years, there’s good news on that front.
The Wall Street Journal (WSJ) polls experts on this topic regularly. And last year at this time, most of them thought a recession would have happened by now. But as experts look at all the leading indicators today, they’re changing their minds and saying a recession is getting less and less likely. The latest results show that more experts now think we’re not headed for another recession (see chart below):
This is big news for the housing market. While the 48% to 52% split may appear close to half and half, the key point to remember is that the majority of these experts believe we have already avoided a recession.
What is the main takeaway? The data shows that there is no reason to be concerned; in fact, there are more signs of hope. Let us talk more about the housing market concerns you have as we enter the new year.