What Will Happen to Home Prices and Mortgage Rates?

If you’re thinking of making a move this year, there are two housing market factors that are probably on your mind: home prices and mortgage rates. You’re wondering what’s going to happen next. And if it’s worth it to move now, or if it's better to wait it out.

The only thing you can do is make the best decision possible based on the most current information available. So, here’s what experts are saying about both prices and rates.

1. What’s Next for Home Prices?

One reliable place you can turn to for information on home price forecasts is the Home Price Expectations Survey from Fannie Mae – a survey of over one hundred economists, real estate experts, and investment and market strategists.

According to the most recent release, experts are projecting home prices will continue to rise at least through 2028 (see the graph below):

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While the percentage of appreciation varies from year to year, this survey predicts that prices will rise (rather than fall) for at least the next five years, at a much more normal rate.

What does that mean for your relocation? If you buy now, your home is likely to increase in value, and you should gain equity in the coming years. However, based on these projections, if you wait and prices continue to rise, the cost of a home will only rise later on. 

2. When Will Mortgage Rates Come Down?

This is the million-dollar question in the industry. And there’s no easy way to answer it. That’s because there are a number of factors that are contributing to the volatile mortgage rate environment we’re in. 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.”

What happens next will be determined by where each of these factors goes from here. Experts believe interest rates will still fall later this year, but they acknowledge that changing economic indicators will continue to have an impact. As a CNET article says:

“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.”

So, if you’re ready, willing, and able to afford a home right now, partner with a trusted real estate advisor to weigh your options and decide what’s right for you. 

Bottom Line

Let us connect to ensure you have the most up-to-date information on home prices and mortgage rate expectations. Together, we’ll go over what the experts are saying so you can make an informed decision on your move.

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