Two Questions You Must Answer as a Homebuyer Today

If you’re considering a move, you’re probably paying attention to information about the market on the news, in conversations with friends and loved ones, and maybe even social media. Home prices and mortgage rates are a popular topic these days. 

As you’re thinking about your decisions, there are two main questions you need to ask yourself: 

1. Where Do I Think Home Prices Are Heading?

The latest Home Price Expectation Survey from Pulsenomics – a survey of over one hundred economists, real estate experts, and investment and market strategists, projects a slight depreciation in prices this year (see the red in the graph below). 

That’s the national news.  Locally, you need to know the worst home price declines are already behind us, and prices are actually appreciating again in many neighborhoods. And let’s face it, the small 0.37% depreciation the national survey shows isn’t anywhere near what some people originally said would happen.

Looking ahead, the green in the graph below shows prices appreciating, with a return to more normal home price appreciation levels for the next several years.  Moving now allows you to take advantage of the expected gain in home equity.  Waiting, based on these forecasts, means paying more in the future. 

2. Where Do I Think Mortgage Rates Are Heading?

Economic uncertainty and inflation have caused in increase in mortgage rates over the last year. While inflation is still higher, it has fallen from its peak. That’s encouraging for mortgage rates as mortgage rates generally fall in response. 

Lower inflation is why some experts are saying mortgage rates will pull back slightly over the next few quarters and settle somewhere around roughly 5.5 and 6% on average.

There are so many factors that can impact mortgage interest rates that not even experts can predict exactly what will happen.  So let’s look at the various possible outcomes you should consider:

• Buy now and rates stay the same: With home prices projected to grow with time, you beat rising prices.
• Buy now and mortgage rates fall (as projected): You get the house before prices appreciated more and can always refinance your home later on if rates are lower.
• Buy now and mortgage rates rise: You bought before both the price of the home and the mortgage rate went up.

Bottom Line

Answering the appreciation and rate questions in your own mind can help you decide if now is the right time for a move. While there’s no crystal ball, expert projections can give you powerful information. Reach out if you’d like to get together and discuss your plans.