Tuesday, January 30, 2024 / by Va Marketing
Thinking About Buying a Home? Ask Yourself These Questions
If you're considering purchasing a home this year, chances are you're closely monitoring the housing market. You're gathering information from various sources like news outlets, social media, your real estate agent, and discussions with friends and family. The topics of home prices and mortgage rates likely dominate these conversations.
Here are the two primary questions you should be asking yourself as you navigate this decision, along with key insights to help you cut through the noise.
What's the Outlook for Home Prices?
A reliable source for understanding home price projections is the Home Price Expectations Survey conducted by Fannie Mae. This survey compiles insights from over a hundred economists, real estate experts, and market strategists.
According to the latest survey findings, these experts anticipate continued growth in home prices at least until 2028 (refer to the graph below):
While the rate of appreciation may not match that of recent years, the crucial takeaway is the consensus that prices will continue to ascend, not decline, over the next five years.
This upward trajectory in home prices, albeit at a more moderate pace, bodes well not only for the market but also for you as a prospective buyer. Buying now positions you to benefit from future value appreciation and accruing home equity. Conversely, delaying your purchase, based on these forecasts, could result in higher costs down the line.
What's the Outlook for Mortgage Rates?
Over the past year, mortgage rates experienced an uptick in response to economic uncertainty and inflationary pressures. However, recent developments suggest a positive shift in the market and mortgage rates.
With inflation showing signs of moderation, mortgage rates typically follow suit by decreasing. This trend has been evident in recent weeks. Moreover, the Federal Reserve's indication of pausing rate hikes and the possibility of rate cuts in 2024 further reinforces expectations of declining mortgage rates.
Danielle Hale, Chief Economist at Realtor.com, elaborates on this trend:
“. . . 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.”
As noted by 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 exact trajectory of mortgage rates remains uncertain, recent developments, including the Federal Reserve's decision, signal optimism for the future. While fluctuations may occur, the overall trend suggests improved affordability as rates continue to decline.
In Conclusion
For prospective homebuyers, staying informed about home prices and mortgage rates is crucial. While predicting their exact movements is challenging, staying abreast of the latest trends empowers you to make well-informed decisions. Reach out to stay updated on market developments and understand how they can benefit you.
