2024 Home Buying Guide: Understanding Market Trends in Prices and Mortgage Rates
If you're considering purchasing a house this year, you might be more attentive to the housing market than usual. You're gathering insights from various sources, including news reports, social media, your real estate agent, and discussions with friends and family. The topics of home prices and mortgage rates are likely frequent in these conversations.
Here are two critical questions to ponder as you decide, along with data that helps sift through the clutter.
What are My Predictions for Home Prices?
A credible source for home price forecasts is the Home Price Expectations Survey from Fannie Mae, which gathers opinions from over a hundred economists, real estate professionals, and investment and market strategists.
The latest survey projects that home prices will keep increasing at least until 2028 (refer to the accompanying graph).
Why is this significant for you? Even if the rate of appreciation isn't as steep as recent years, the key takeaway is an expected price rise, not a decline, for the next five years.
This upward trend in home prices is positive news for the market and for potential buyers. Purchasing now means your property is likely to appreciate in value, enhancing your home equity. However, delaying your purchase could result in higher costs later, as per these projections.
What are My Predictions for Mortgage Rates?
In the past year, mortgage rates sharply increased due to economic uncertainties and inflation. But there's positive news on the horizon for the market and mortgage rates. As inflation eases, mortgage rates typically drop. This trend has been observed recently. With the Federal Reserve indicating a pause in rate hikes and possible reductions in 2024, experts anticipate a further decrease in mortgage rates.
Danielle Hale, Chief Economist at Realtor.com, states that mortgage rates will likely continue to decrease in 2024 as inflation stabilizes and Fed rate cuts become more likely, improving affordability for homebuyers.
The National Association of Realtors (NAR) concurs that mortgage rates, having peaked near 8%, are now on a downward trajectory, which should enhance housing affordability and attract more buyers to the market.
It's impossible to predict mortgage rates with complete certainty, but recent trends and Federal Reserve policies suggest a more hopeful outlook. Despite potential short-term fluctuations, overall affordability is expected to improve as rates decrease.
When considering a home purchase, staying informed about expected trends in home prices and mortgage rates is crucial. While future movements are uncertain, having the latest information aids in making an educated decision. Connect with professionals to keep abreast of market developments and understand why this is advantageous for you.