As the housing market cools in response to the dramatic rise in mortgage rates, home price appreciation is cooling as well. And if you’re following along with headlines in the media, you’re probably seeing a wide range of opinions calling for everything from falling home prices to ongoing appreciation. But what’s true? What’s most likely to happen moving forward?

While opinions differ, the most likely outcome is we’ll fall somewhere in the middle of slight appreciation and slight depreciation. Here’s a look at the latest expert projections so you have the best information possible today.

What the Experts Are Saying About Home Prices Next Year

The graph below shows the most up-to-date forecasts from five experts in the housing industry. These are the experts that have most recently updated their projections based on current market trends:

As the graph shows, the three blue bars represent experts calling for ongoing home price appreciation, just at a more moderate rate than recent years. The red bars on the graph are experts calling for home price depreciation.

While there isn’t a clear consensus, if you take the average (shown in green) of all five of these forecasts, the most likely outcome is, nationally, home price appreciation will be fairly flat next year.

What Does This Mean?

Basically, experts are divided on what’s ahead for 2023. Home prices will likely depreciate slightly in some markets and will continue to gain ground in others. It all depends on the conditions in your local market, like how overheated that market was in recent years, current inventory levels, buyer demand, and more.

The good news is home prices are expected to return to more normal levels of appreciation rather quickly. The latest forecast from Wells Fargo shows that, while they feel prices will fall in 2023, they think prices will recover and net positive in 2024. That forecast calls for 3.1% appreciation in 2024, which is a number much more in line with the long-term average of 4% annual appreciation.

And the Home Price Expectation Survey (HPES) from Pulsenomics, a poll of over one hundred industry experts, also calls for ongoing appreciation of roughly 2.6 to 4% from 2024-2026. This goes to show, even if prices decline slightly next year, it’s not expected to be a lasting trend.

As Jason Lewris, Co-Founder and Chief Data Officer for Parcl, says:

“In the absence of trustworthy, up-to-date information, real estate decisions are increasingly being driven by fear, uncertainty, and doubt.”

Don’t let fear or uncertainty change your plans. If you’re unsure about where prices are headed or how to make sense of what’s going on in today’s housing market, reach out to a local real estate professional for the guidance you need each step of the way.

Bottom Line

The housing market is shifting, and it’s a confusing place right now. Let’s connect so you have a trusted real estate professional to help you make confident and informed decisions about what’s happening in our market.

While the Federal Reserve is working hard to bring down inflation, the latest data shows the inflation rate is still high, remaining around 8%. This news impacted the stock market and added fuel to the fire for conversations about a recession.

You’re likely feeling the impact in your day-to-day life as you watch the cost of goods and services climb. The pinch it’s creating on your wallet and the looming economic uncertainty may leave you wondering: “should I still buy a home right now?” If that question is top of mind for you, here’s what you need to know.

Homeownership Is Historically a Great Hedge Against Inflation

In an inflationary economy, prices rise across the board. Historically, homeownership is a great hedge against those rising costs because you can lock in what’s likely your largest monthly payment (your mortgage) for the duration of your loan. That helps stabilize some of your monthly expenses. James Royal, Senior Wealth Management Reporter at Bankrate, explains:

“A fixed-rate mortgage allows you to maintain the biggest portion of housing expenses at the same payment. Sure, property taxes will rise and other expenses may creep up, but your monthly housing payment remains the same.”

And with rents being as high as they are, the ability to stabilize your monthly payments and protect yourself from future rent hikes may be even more important. Lawrence Yun, Chief Economist at the National Association of Realtors (NAR), explains what happened to rents in the latest inflation report:

“Inflation refuses to budge. In September, consumer prices rose by 8.2%. Rents rose by 7.2%, the highest pace in 40 years.”

When you rent, your monthly payment is determined by your lease, which typically renews on an annual basis. With inflation high, your landlord may be more likely to increase your payments to offset the impact of inflation. That may be part of the reason why a survey from realtor.com shows 72% of landlords said they plan to raise the rent on one or more of their properties in the next year.

Becoming a homeowner, if you’re ready and able to do so, can provide lasting stability and a reliable shelter in times of economic uncertainty.

Bottom Line

The best hedge against inflation is a fixed housing cost. If you’re ready to learn more and start your journey to homeownership, let’s connect.

The housing market is rapidly changing from the peak frenzy it saw over the past two years. That means you probably have questions about what your best move is if you’re thinking of buying or selling this fall.

To help you make a confident decision, lean on the professionals for insights. Here are a few things experts are saying about the fall housing market.

Expert Quotes for Fall Homebuyers

A recent article from realtor.com:

“This fall, a more moderate pace of home selling, more listings to choose from, and softening price growth will provide some breathing room for buyers searching for a home during what is typically the best time to buy a home.”

Michael Lane, VP and General Manager, ShowingTime:

“Buyers will continue to see less competition for homes and have more time to tour homes they like and consider their options.” 

Expert Quotes for Fall Sellers

Selma Hepp, Interim Lead of the Office of the Chief Economist, CoreLogic:

“. . . record equity continues to provide fuel for housing demand, particularly if households are relocating to more affordable areas.”

Danielle Hale, Chief Economist, realtor.com: 

“For homeowners deciding whether to make a move this year, remember that listing prices – while lower than a few months ago – remain higher than in prior years, so you're still likely to find opportunities to cash-in on record-high levels of equity, particularly if you've owned your home for a longer period of time.”

Bottom Line

Mortgage rates, home prices, and the supply of homes for sale are top of mind for buyers and sellers today. And if you want the latest information for our area, let’s connect today.

Today’s housing market is different than it was just a few months ago. And if you’re thinking about selling your house, that may leave you wondering what you need to do differently as a result. The answer is simple. Taking the time upfront to prep your house appropriately and create a solid plan can help bring in the greatest return on your investment.

Here are a few simple tips to make sure you maximize the sale of your house this fall.

1. Price It Right

One of the first things buyers will notice is the price of your house. That’s because the price sends a message to home shoppers. Pricing your house too high to begin with could put you at a disadvantage by discouraging buyers from making an offer. On the flip side, pricing your house too low may make buyers worry there’s some underlying issue or something wrong with the home.

Your goal in pricing your house is to gain the attention of prospective buyers and get them to make an offer. And with price growth and buyer demand moderating, as well as a greater supply of homes available for sale, pricing your home appropriately for where the market is today has become more important than ever before.

But how do you know that perfect number? Pricing your house isn’t a guessing game. It takes skill and expertise. Work with a trusted real estate advisor to determine the current market value for your home.

2. Keep It Clean

It may sound simple but keeping your house clean is another key to making sure it gets the attention it deserves. As realtor.com says in the Home Selling Checklist:

“When selling your home, it’s important to keep everything tidy for buyers, and you never know when a buyer is going to want to schedule a last-minute tour.”

Before each buyer visits, assess your space and determine what needs your attention. Wash the dishes, make the beds, and put away any clutter. Doing these simple things can reduce potential distractions for buyers.

For more tips, check out this checklist for preparing your house for sale. Ultimately an agent is your best resource for tailored advice, but this list can help get you started.

3. Help Buyers Feel at Home

Finally, it’s important for buyers to see all the possible ways they can make your house their next home. An easy first step to create this blank canvas is removing personal items, like pictures, awards, and sentimental belongings. It’s also a good idea to remove any excess furniture to help the rooms feel bigger and make sure there’s ample space for touring buyers to stand and look at the layout.

If you’re unsure what should be packed away and what can stay, consult your trusted real estate advisor. Spending the time on this step can pay off in the long run. As a recent article from the National Association of Realtors (NAR) explains:

“Staging is the art of preparing a home to appeal to the greatest number of potential buyers in your market. The right arrangements can move you into a higher price-point and help buyers fall in love the moment they walk through the door.”

Bottom Line

Selling a house requires prep work and expertise. If you’re looking to sell your house this season, let’s connect so you have advice on how to get it ready to list, how to help it stand out in today’s shifting market, and more.

As you set out to buy a home, saving for a down payment is likely top of mind. But you may still have questions about the process, including how much to save and where to start.

If that sounds like you, your down payment could be more in reach than you originally thought. Here’s why.

The 20% Down Payment Myth

If you believe you have to put 20% down on a home, you may have based your goal on a common misconception. Freddie Mac explains:

“. . . nearly a third of prospective homebuyers think they need a down payment of 20% or more to buy a home. This myth remains one of the largest perceived barriers to achieving homeownership.”

Unless it’s specified by your loan type or lender, it’s typically not required to put 20% down. According to the latest Profile of Home Buyers and Sellers from the National Association of Realtors(NAR), the median down payment hasn’t been over 20% since 2005. There are even loan types, like FHA loans, with down payments as low as 3.5%, as well as options like VA loans and USDA loans with no down payment requirements for qualified applicants.

This is good news for you because it means you could be closer to your homebuying dream than you realize. For more information, turn to a trusted lender.

Down Payment Assistance Programs Can Be a Game Changer

A professional will be able to show you other options that could help you get closer to your down payment goal. According to latest Homeownership Program Index from downpaymentresource.com, there are over 2,000 homebuyer assistance programs in the U.S., and the majority are intended to help with down payments.

A recent article explains why programs like these are helpful:

“These resources can immediately build your home buying power and help you take action sooner than you thought possible.”

And if you’re wondering if you have to be a first-time buyer to qualify for these programs, that’s not always the case. According to an article from downpaymentresource.com:

“It is a common misconception that homebuyer assistance is only available to first-time homebuyers, however, 38% of homebuyer assistance programs in Q1 2022 did not have a first-time homebuyer requirement.”

There are also location and profession-based programs you could qualify for as well.

Bottom Line

Saving for your down payment is an important first step on your homebuying journey. Let’s connect today and make sure you have a trusted lender to help explore your options.

Mortgage rates have increased significantly in recent weeks. And that may mean you have questions about what this means for you if you’re planning to buy a home. Here’s some information that can help you make an informed decision when you set your homebuying plans.

The Impact of Rising Mortgage Rates

As mortgage rates rise, they impact your purchasing power by raising the cost of buying a home and limiting how much you can comfortably afford. Here’s how it works.

Let’s assume you want to buy a $400,000 home (the median-priced home according to the National Association of Realtors is $389,500). If you’re trying to shop at that price point and keep your monthly payment about $2,500-2,600 or below, here’s how your purchasing power can change as mortgage rates climb (see chart below). The red shows payments above that threshold and the green indicates a payment within your target range.

As the chart shows, as rates go up, the amount you can afford to borrow decreases and that may mean you have to look at homes at a different price point. That’s why it’s important to work with a real estate advisor to understand how mortgage rates impact your monthly mortgage payment at various home loan amounts.

Are Mortgage Rates Going To Go Down?

The rise in mortgage rates and the resulting decrease in purchasing power may leave you wondering if you should wait for rates to go down before making your purchase. Realtor.com says this about where rates could go from here:

“Many homebuyers likely winced . . . upon hearing that the Federal Reserve yet again boosted its short-term interest rates by three-quarters of a percentage point—a move that’s pushing mortgage rates through the roof. And the already high rates are just going to get higher.”

So, if you’re waiting for mortgage rates to drop, you may be waiting for a while as the Federal Reserve works to get inflation under control.

And if you’re considering renting as your alternative while you wait it out, remember that’s going to get more expensive with time too. As Nadia Evangelou, Senior Economist and Director of Forecasting at the National Association of Realtors (NAR), says:

“There is no doubt that these higher rates hurt housing affordability. Nevertheless, apart from borrowing costs, rents additionally rose at their highest pace in nearly four decades.”

Basically, it is true that it costs more to buy a home today than it did last year, but the same is true for renting. This means, either way, you’re going to be paying more. The difference is, with homeownership, you’re also gaining equity over time which will help grow your net worth. The question now becomes: what makes more sense for you?

Bottom Line

Each person’s situation is unique. To make the best decision for you, let's connect to explore your options.

Rising interest rates have begun to slow an overheated housing market as monthly mortgage payments have risen dramatically since the beginning of the year. This is leaving some people who want to purchase a home priced out of the market and others wondering if now is the time to buy one. But this rise in borrowing cost shows no signs of letting up soon.

Economic uncertainty and the volatility of the financial markets are causing mortgage rates to rise. George Ratiu, Senior Economist and Manager of Economic Research at realtor.com, says this:

“While even two months ago rates above 7% may have seemed unthinkable, at the current pace, we can expect rates to surpass that level in the next three months.”

So, is now the right time to buy a home? Anyone thinking about buying a home today should ask themselves two questions:

1. Where Do I Think Home Prices Are Heading?

There are two places to turn to answer this question. First is the consensus of what experts are saying. If you look at what experts are projecting for home prices in 2023, they’re forecasting home price appreciation around 2%. While it’s true some are calling for depreciation, most are calling for appreciation in home values over the next year.

The second spot to turn to for information is the Home Price Expectation Survey from Pulsenomics – a survey of a national panel of over one hundred economists, real estate experts, and investment and market strategists. According to the latest release, the experts surveyed are also calling for home price appreciation for the next several years (see graph below):

2. Where Do I Think Interest Rates Are Heading?

Like mentioned above, Ratiu sees mortgage rates rising over the next several months. Another expert agrees. Mark Fleming, Chief Economist at First American, says:

“While mortgage rates are expected to continue to drift higher over the coming months, much of the rapid increase in rates is likely behind us.” 

The instability in the world and higher inflation are driving this volatile market, resulting in higher borrowing rates for those looking to buy homes.

Bottom Line

If you’re thinking about buying a home, asking yourself about home prices and mortgage rates will help you make a powerful and confident decision. Experts see both prices and rates rising in the future. The alternative is to rent, but rents are also increasing. That may mean buying a home makes more sense than renting.