What’s going on with the housing market, and what to expect in the future.

Should you still make the move this year? What will happen in this housing market? So many people are wondering these same questions. With all the unpredictability in our economy right now, we are seeing a lot of uncertainty in the real estate market. Well, let me give you some information that might help you make an informed decision. 

First, we have seen a drastic increase in mortgage rates, almost 2% from the beginning of the year. However, remember that the very low interest rates we experienced during the pandemic were an outlier. The average interest rate in the last 40 years has been around 6% to 7%, and we are hovering around 5% right now. 

Unfortunately, because of the inflation we are experiencing, it is hard to predict if the rates will continue to increase. Greg McBride, the chief financial analyst for Bankrate, says, “Until inflation peaks, mortgage rates won’t either. Without improvement on the inflation front, we don’t know where the interest rate ceiling will be.” 

“These changes are not enough to completely turn our seller's market into a buyer's market.”

Another concern that a lot of people have is about inventory levels. For the last year or two, we have seen record-low inventory, which has created an extremely strong seller's market. However, in the last few months, we have seen an increase in inventory, and most experts believe this trend will continue. 

One big reason for this is a lot of buyers are leaving the market because of the increasing interest rates, therefore decreasing the demand. Still, this increase in inventory is not enough to completely turn our seller's market into a buyer's market. 

Lastly, we have seen record price appreciation over the last two years. In one year, our area’s home prices increased by 11%, and double-digit increases were almost unheard of before the pandemic. Will this appreciation continue? We interviewed seven experts, and their combined forecasts averaged an increase of about 8.5%. Therefore, according to these experts, home prices will continue to appreciate, but the rate of appreciation will start to slow. 

Now, this is a lot of data, and there are many things to think about when considering buying or selling a home! If you’re considering buying or selling, give me a call; I’d love to have a conversation with you to figure out if now is the right time to make a move.