Navigating the complex world of homebuying requires an understanding of key market indicators like housing prices and mortgage rates. At Gold Financial Services, we understand the importance of these metrics in your decision-making process and we're here to guide you through it all. In an ever-shifting housing market, it's crucial to seek out reliable and relevant data. Two primary questions you should consider in your home-buying journey are:
1. Where Do I Think Home Prices Are Heading?
One reliable place you can turn to for that information is the Home Price Expectation Survey (HPES) from – this is a survey of a national panel of over one hundred economists, real estate experts, and investment and market strategists. These credible individuals are providing people with information that is meant to benefit their home selling or buying process. According to the latest release, the experts surveyed are projecting a slight depreciation to occur this year. However, here’s the context you need most. The worst home price declines are already behind us, and prices are actually appreciating again in many markets. In addition, the small 0.37% depreciation HPES is showing for 2023 is far from the crash some people originally predicted would happen.
Now, what does the future have in store for us? Home prices are expected to turn a corner and appreciate in 2024 and beyond. After this year, the HPES is forecasting home price appreciation returning to realistic levels for the next several years. The big question is why does this matter to you? What this means is your home will likely grow in value and you should look to gain home equity in the years ahead, but only if you buy now. The longer you wait, based on these forecasts, the home will only cost you more later on.
2. Where Are Mortgage Rates Heading?
Over the past year, mortgage rates have increased in response to economic uncertainty, inflation, and more. What we know based on the latest reports inflation, while still high, has moderated from its peak. This is an encouraging sign for the market and for mortgage rates. Not sure why? Let us explain.
When inflation tampers down, mortgage rates generally fall in response. This could be why some experts are predicting mortgage rates will pull back slightly over the next few quarters and settle somewhere around roughly 5.5 and 6% on average. This is optimistic thinking and the type of mindset everyone should strive for, especially those interacting with the housing market. However, not even the experts can say with absolute certainty where mortgage rates will look like next year, or even next month. The reason is because there are so many factors that can impact what happens. Therefore, to provide you a lens into the various possible outcomes, here’s what you should consider:
If you buy now and mortgage rates don’t change: Don’t doubt yourself! Purchasing a home now would be good since prices are projected to grow with time, so at least you will be proactive before rising prices occur.
If you buy now and mortgage rates fall (as projected): This may not apply to all buyers. You probably still made a good decision because you got the house before home prices appreciated more. Instead, you’ll have the option to refinance your home later on if rates start getting lower.
If you buy now and mortgage rates rise: This is the best scenario you can put yourself in! If this happens, you made a great decision because you purchased before both the price of the home and the mortgage rate went up. This is the ideal situation you want to be in since buying a home is a large feat alone.
Here's the Bottom Line:
If you’re considering buying a home, you need to know what’s expected with home prices and mortgage rates. While no one can predict or say for certain where they’ll go, expert projections can give you powerful information to keep you informed. If you’re curious to know how you can start the homebuying process, reach out to Gold Financial Services, your local mortgage lender in San Antonio, TX, that has helped people find their dream homes for over 25 years. Lean on trusted real estate professionals who can add in expert opinions on your local market.