What’s Next for Home Prices and Mortgage Rates? ????

Sasha Tripp here, Owner and Principal Broker at Story House Real Estate in Charlottesville, VA. If you’re considering making a move this year, two key factors are likely on your mind: home prices and mortgage rates. You might be wondering what’s going to happen next and whether it's better to move now or wait it out.

The best approach is to make an informed decision based on the latest available information. Here’s what experts are saying about both prices and rates:

1. What’s Next for Home Prices?

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

According to the most recent release, experts project that home prices will continue to rise at least through 2028. ??

• While the rate of appreciation varies year-to-year, this survey indicates that prices will rise (not fall) for at least the next five years, and at a more normal pace compared to the rapid increases seen recently.

What does that mean for your move?

• If you buy now, your home will likely grow in value, and you should gain equity in the years ahead.
• If you wait and prices continue to climb, the cost of buying a home will likely be higher later on.

2. When Will Mortgage Rates Come Down?

This is the million-dollar question in the industry, and there’s no easy answer due to the number of factors influencing the volatile mortgage rate environment. 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 depend on several factors:

• Inflation: Ongoing deceleration could help lower rates.
• Economy: A slowing economy might contribute to rate reductions.
• Geopolitical Uncertainty: Events around the world can also impact rates.

Experts are optimistic that rates should come down later this year but acknowledge that changing economic indicators will continue to influence the market. As a CNET article notes:

“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.” ????

Bottom Line

If you’re ready, willing, and able to afford a home right now, it's wise to partner with a trusted real estate advisor to weigh your options and decide what’s right for you. Here’s why:

• Expert Guidance: Connect with a real estate professional who can provide the latest information on home prices and mortgage rate expectations.
• Informed Decisions: Together, you’ll review what the experts are saying so you can make the best decision for your move.

At Story House Real Estate, we are committed to helping you navigate these complex times. Reach out today to discuss your options and make an informed decision about your next move in the housing market. ????

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