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Anticipating Future Trends in Home Prices and Mortgage Rates

If you are considering a change this year, two key factors in the housing market are likely top of mind: home prices and mortgage rates. You may be pondering what the future holds and whether it's the right time to make a move or better to wait it out.

Your best course of action is to make an informed decision based on the latest available information. Here's an overview of expert opinions on both prices and rates:

1. Home Prices Outlook

For insights into home price forecasts, a reliable source is the Home Price Expectations Survey by Fannie Mae, which gathers input from over a hundred economists, real estate professionals, and investment and market experts.

The latest data suggests experts anticipate a continued rise in home prices at least until 2028 (refer to the graph below):

While the annual appreciation rate fluctuates, this survey indicates a continuous increase in prices over the next five years, albeit at a more stable pace.

• Purchasing now could potentially result in your home appreciating in value, building equity over time. However, if you delay and prices continue to rise, the cost of a home will likely be higher later on.

2. Anticipating Mortgage Rate Adjustments

Forecasting mortgage rate adjustments remains a complex issue within the industry. The mortgage rate landscape is influenced by various elements, such as inflation and labor data fluctuations. Odeta Kushi, Deputy Chief Economist at First American, elucidates:

"Each month introduces new inflation and labor data that can sway mortgage rates. Factors like diminishing inflation, a slowing economy, or geopolitical uncertainties can contribute to decreased mortgage rates. Conversely, indicators pointing towards inflation risks may lead to increased rates."

Future developments are contingent on the trajectory of these factors. While experts express optimism about potential rate reductions later this year, they acknowledge the continuous impact of evolving economic indicators. As noted by a CNET article:

"Even though there is a possibility of mortgage rates decreasing later in the year, housing market forecasts are subject to frequent adjustments based on economic data and geopolitical occurrences."

If you are prepared to purchase a home now, collaborate with a reputable real estate advisor to explore your alternatives and determine the best course of action for your situation.

Moral of the Story

Engage with a reliable real estate agent to stay informed about current home prices and mortgage rate projections. By consulting with industry experts, you can evaluate the evolving market trends and make well-informed decisions regarding your housing plans.

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