If you plan to buy a home this year, you’re probably paying closer attention to the housing market than normal. And you’re getting your information from various channels: the news, social media, a trusted real estate advisor, conversations with friends and loved ones, the list goes on and on.
Most likely, home prices and mortgage rates are coming up a lot.
Here are the top 2 questions you must ask yourself as you decide, including the data that helps cut through the noise.
1. Where Do I Think Home Prices Are Heading?
One reliable source for home information price forecasts is the Home Price Expectations Survey from Fannie Mae – a survey of over one hundred economists, real estate experts, and investment and market strategists.
According to the most recent release, the experts are projecting home prices will continue to rise at least through 2028 (see the graph below):
So, why does this matter to you?
While the percent of appreciation may not be as high as it was in recent years, what’s important to focus on is that this survey says we’ll see prices rise, not fall, for at least the next 5 years.
And rising home prices, even at a more moderate pace, is good news for the market and you.
By buying now, your dream home will likely grow in value, and you should gain home equity in the years ahead.
But, based on these forecasts, the home will only cost you more later if you wait.
[you can also find the expert forecasts for home prices in 2023.]
2. Where Do I Think Mortgage Rates Are Heading?
Over the past year, mortgage rates spiked due to economic uncertainty, inflation, and more. But there’s an encouraging sign for the market and mortgage rates.
Inflation is moderating, and here’s why this is such a big deal if you’re looking to buy a home.
When inflation cools, mortgage rates generally fall in response. That’s exactly what we’ve seen in recent weeks.
And, now that the Federal Reserve has signaled they’re pausing their Federal Funds Rate increases and may even cut rates in 2024, experts are even more confident we’ll see mortgage rates come down.
Danielle Hale, Chief Economist at Realtor.com, explains:
“. . . 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 an article from the National Association of Realtors (NAR) says:
“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 . . .”
No one can know where mortgage rates will go from here. But the recent decline and the latest decision from the Federal Reserve to stop their rate increases signals hope on the horizon.
While we may see some volatility here and there, affordability should improve as rates continue to ease.
Bottom Line
If you’re considering buying a new home in Chicago, Illinois, you need to know what’s expected with home prices and mortgage rates. While no one can say where they’ll go, ensuring you have the latest information can help you make an informed decision.
Let’s have a 30-minute call with one of the top-rated real estate professionals in the Chicagoland area and surrounding suburbs so you can stay current on what’s happening and why this is such good news for you.
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