Are the Top 3 Housing Market Questions on Your Mind?
Concerns and uncertainties abound in the current real estate landscape, making it challenging to decipher the true state of the housing market. Conversations with friends, media reports, and social media posts often provide conflicting information, leaving potential homebuyers with lingering questions. In such a perplexing environment, the guidance of a reliable local real estate agent becomes invaluable.
Addressing the prevailing queries about today’s housing market, we delve into the top three questions on people’s minds, supported by relevant data.
1. What’s Next for Mortgage Rates?
The relationship between mortgage rates and inflation has been a long-standing one. Typically, when inflation is on the rise, mortgage rates tend to follow suit. Over the past year, inflation witnessed an uptick, leading to a parallel increase in mortgage rates. However, the recent easing of inflation prompted the Federal Reserve to pause federal funds rate hikes. Many experts now speculate a downward trend in mortgage rates, with hints of slight decreases already observed in recent weeks. Although volatility is expected, the prevailing anticipation is for a more stable and downward trajectory 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.”
2. Where Are Home Prices Headed?
Despite initial concerns of a potential crash in home prices, data indicates a contrary trend. Home prices are, in fact, rising in most regions of the nation. Experts project this upward movement to persist, albeit at a more moderate pace considered normal for the housing market, which is viewed positively.
To underscore the confidence in this sustained appreciation, the Home Price Expectation Survey from Pulsenomics provides insights from a national panel comprising over 100 economists, real estate experts, and investment strategists. The consensus depicted in the survey graph suggests a continued climb in prices not only in the coming year but also in subsequent years, reassuring those navigating the real estate landscape.
3. Is an Economic Downturn Imminent?
Although discussions about a potential recession have been prevalent in recent years, there is encouraging news on this front.
The Wall Street Journal (WSJ) consistently surveys experts on the likelihood of a recession. This time last year, the majority of these experts anticipated a recession would have already occurred. However, upon reevaluating the current leading indicators, their perspectives are shifting, indicating that the likelihood of a recession is diminishing. The most recent findings reveal a growing consensus among experts that we are not on the brink of another recession (refer to 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. Let’s connect to talk more about the housing market questions on your mind as we head into the new year.
