Today’s Top 3 Housing Market Questions
When it comes to the current state of the housing market, there is considerable confusion. Conversations with friends, news reports, and social media posts often present conflicting information. If you're contemplating a move, this can leave you with numerous lingering questions, and that's where a reliable local real estate agent becomes invaluable.
Here, we address the top three questions people have about today's housing market, providing data to offer informed answers.
What's the Outlook for Mortgage Rates? Mortgage rates have risen in recent years, impacting home affordability for potential buyers. Many are eager to know what lies ahead for mortgage rates. While no one can predict with certainty, historical trends offer insights.
Mortgage rates and inflation have a longstanding relationship. When inflation is high, mortgage rates tend to follow suit. Over the past year, inflation increased, leading to higher mortgage rates. However, with inflation easing, the Federal Reserve has paused federal funds rate hikes, indicating a potential decline in mortgage rates.
Recent weeks have shown slight hints of lower mortgage rates, although the market remains volatile. Expect ongoing variation, but the anticipation is for a downward trend in 2024, as suggested by Aziz Sunderji, Strategist at Home Economics: "Interest rates are likely to be lower—perhaps even lower than many optimists think—in the weeks and months to come."
Where Are Home Prices Heading? Despite concerns of a housing market crash, data indicates that home prices are on the rise across most of the nation. Experts predict this trend will continue, albeit at a slower pace, aligning with a more normal trajectory for the housing market.
Confidence in this continued appreciation is evident in the Home Price Expectation Survey from Pulsenomics, which surveys a national panel of over 100 economists, real estate experts, and investment and market strategists. The consensus among experts is that prices will continue to climb in the coming year and beyond.
Is a Recession Imminent? Recession talks have been prevalent in recent years, but there is positive news on this front. Regular polls conducted by The Wall Street Journal (WSJ) on this topic reveal a shift in expert opinions.
A year ago, most experts anticipated a recession by now. However, as experts analyze current leading indicators, the consensus is shifting, with more experts expressing doubt about another recession, as depicted in the chart below.
This is big news for the housing market. And while the 48% to 52% split may seem close to half and half, the key thing to focus on is that the majority of these experts think we’ve avoided a recession already.
Bottom Line
The big takeaway? The data shows there isn’t cause for concern – there are actually more signs of hope. Reach out to a local real estate agent to talk more about the housing market questions on your mind heading into the new year.
Disclaimer: The information provided in this blog post is based on the latest available data at the time of writing, which is subject to change. It is intended for informational purposes only and should not be considered as financial or investment advice.