Thinking About Buying a Home? Ask Yourself These Questions
Clayton Jeffrey
Licensed Associate Real Estate Broker at Keller Williams Realty, Inc.
As you contemplate the prospect of buying a home this year, you're likely absorbing information from various sources, including news outlets, social media, real estate agents, and conversations with friends and family. Among the many factors on your radar, home prices and mortgage rates are likely taking center stage. Here are two key questions to guide your decision-making process, along with data to help you cut through the noise.
1. Where Do I Think Home Prices Are Heading? For reliable insights into home price forecasts, turn to the Home Price Expectations Survey from Fannie Mae. This survey compiles projections from economists, real estate experts, and market strategists. According to the latest release, experts foresee a continued rise in home prices at least through 2028. While the rate of appreciation may not match recent years, the crucial takeaway is the projection of rising prices for the next five years.
Why does this matter? Buying now positions your home to likely grow in value, building home equity over the years. Waiting, as per these forecasts, could mean a higher cost later on.
2. Where Do I Think Mortgage Rates Are Heading? In the past year, mortgage rates experienced fluctuations due to economic uncertainty and inflation. However, there's encouraging news for prospective homebuyers. As inflation moderates, mortgage rates tend to fall. Recent weeks have seen this trend, and with the Federal Reserve signaling a pause in rate increases and potential cuts in 2024, experts are optimistic about further declines.
Danielle Hale, Chief Economist at Realtor.com, notes:
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“. . . mortgage rates will continue to ease in 2024 as inflation improves and Fed rate cuts get closer. . . . a key factor in starting to provide affordability relief to homebuyers.”
According to the National Association of Realtors (NAR):
“Mortgage rates likely have peaked and are now falling from their recent high of nearly 8%. . . . This likely will improve housing affordability and entice more home buyers to return to the market . . .”
While the future trajectory of mortgage rates remains uncertain, recent declines and the Federal Reserve's stance offer hope for improvement in affordability.
Bottom Line For those contemplating a home purchase, staying informed about home prices and mortgage rates is crucial. While certainty is elusive, having the latest information empowers you to make informed decisions. Let's connect to keep you updated on market trends and explore how these developments work in your favor.