Thinking About Buying a Home? Cut Through the Noise with These Essential Questions

Thinking About Buying a Home? Cut Through the Noise with These Essential Questions

Are you mulling over the idea of snagging a property this year? I bet you're practically glued to the housing market updates. And where's this intel coming from? The news, social media, your chatty real estate agent, and those endless family dinners, right? It's pretty clear that the chatter about home prices and mortgage rates is everywhere.

Let's dive into the two critical questions you need to grill yourself on before making a move, armed with data to slice through the baloney.

1. Home Prices: What's Their Next Move? When it comes to predicting home prices, don't just rely on any Tom, Dick, or Harry. A solid source is the Home Price Expectations Survey by Fannie Mae. This thing's no joke – they've got over a hundred economists, real estate whizzes, and market strategists weighing in.

The latest scoop? These experts see home prices climbing up at least until 2028 (check out the graph they've thrown together):

So, why should you care? While the uptick in prices might not match the recent frenzy, the key takeaway here is that prices are predicted to rise, not nosedive, for a good five years or so.

What this means for you: Rising home prices, even at a slower pace, is a win-win for the market and for you. By buying now, you're likely to see your property's value inflate, beefing up your home equity down the line. But if you hit the snooze button, expect to cough up more cash later based on these forecasts.

2. Mortgage Rates: Where Are They Headed? Mortgage rates have been on a wild ride lately, thanks to economic jitters, inflation, and whatnot. But there's a light at the end of the tunnel for the market and mortgage rates. With inflation chilling out, mortgage rates typically follow suit by dropping. That's exactly the trend we've seen recently. And with the Federal Reserve playing it cool on rate hikes and possibly slashing them in 2024, the experts are betting on mortgage rates to mellow out.

Here's the word from Danielle Hale, Chief Economist at Realtor.com:

“. . . 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.”

And the National Association of Realtors (NAR) chimes in:

“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 . . .”

Predicting mortgage rates is not an exact science. But the recent dip and the Federal Reserve's latest stance signal a potential uptick in affordability. Sure, there might be some ups and downs, but things are looking up for buyers as rates continue to soften.

Bottom Line If you're on the fence about buying a house, you need the latest on home prices and mortgage rates. No one has a crystal ball to see the future, but staying informed is crucial. Hook up with a reputable local real estate agent to keep your finger on the pulse. It's good news, and you need to know why.