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Considering a Home Purchase? Ask Yourself These Key Questions

Considering a Home Purchase? Ask Yourself These Key Questions

If the idea of purchasing a home has been on your mind lately, chances are you're closely monitoring the housing market. Gathering information from various sources such as news outlets, social media, your real estate agent, and conversations with friends and family, you're likely bombarded with discussions about home prices and mortgage rates. Amidst the noise, it's crucial to ask yourself two fundamental questions and equip yourself with relevant data to make an informed decision.

1. Where Do I Anticipate Home Prices Going?

A reliable source for insights into home price forecasts is the Home Price Expectations Survey conducted by Fannie Mae. This survey aggregates opinions from over a hundred economists, real estate experts, and investment and market strategists.

According to the latest release, these experts project a continuous rise in home prices at least until 2028, as illustrated in the accompanying graph. While the rate of appreciation might not match recent years, the key takeaway is the projection of rising prices for the next five years.

Why is this significant for you? Even if the percentage of appreciation is more moderate, the fact that prices are expected to rise means that buying a home now could result in future value growth and increased home equity. Delaying your decision, based on these forecasts, may mean a higher cost for the same home in the future.

2. Where Do I Anticipate Mortgage Rates Going?

Over the past year, mortgage rates experienced spikes due to economic uncertainty and inflation. However, there's a positive indicator for both the market and mortgage rates. As inflation moderates, mortgage rates typically respond by falling. Recent weeks have seen this trend, and with the Federal Reserve signaling a pause in rate increases and the potential for cuts in 2024, experts express confidence in a decline in mortgage rates.

Danielle Hale, Chief Economist at Realtor.com, emphasizes that mortgage rates are expected to ease in 2024 as inflation improves, providing affordability relief to homebuyers. The National Association of Realtors supports this outlook, stating that mortgage rates likely have peaked and are now on a downward trend.

While the future trajectory of mortgage rates is uncertain, recent developments and the Federal Reserve's decisions suggest a hopeful outlook. Affordability should improve as rates continue to ease, even if some volatility is experienced along the way.

In Conclusion

If the prospect of buying a home is on your radar, it's crucial to stay informed about expected trends in home prices and mortgage rates. While absolute certainty is elusive in these matters, having the latest information empowers you to make a well-informed decision. Reach out, and let's connect, ensuring you stay abreast of developments and understand why the current market conditions can be advantageous for you.