Over the past year, home prices have been a widely debated topic. Some have said we’ll see a massive drop in prices and that this could be a repeat of 2008 – which hasn’t happened. Others have forecasted a real estate market that could see slight appreciation or depreciation depending on the area of the country. And as we get closer to the spring real estate market, experts are continuing to forecast what they believe will happen with home prices this year and beyond.
“While 2023 kicked off on a more optimistic note for the U.S. housing market, recent mortgage rate volatility highlights how much uncertainty remains. Nevertheless, the continued shortage of for-sale homes is likely to keep price declines modest, which are projected to top out at 3% peak to trough.”
Additionally, every quarter, Pulsenomicssurveys a panel of over 100 economists, investment strategists, and housing market analysts regarding their five-year expectations for future home prices in the United States. Here’s what they said most recently:
So, given this information and what experts are saying about home prices, the question you might be asking is: should I buy a home this spring? Here are three reasons you should consider making a move:
Buying a home helps you escape the cycle of rising rents. Over the past several decades, the median price of rent has risen consistently. The bottom line is, rent is going up.
Homeownership is a hedge against inflation. A key advantage of homeownership is that it’s one of the best hedges against inflation. When you buy a home with a fixed-rate mortgage, you secure your housing payment, so it won’t go up like it would if you rent.
Homeownership is a powerful wealth-building tool. The average net worth of a homeowner is $255,000 compared to $6,300 for a renter.
Experts are projecting slight price depreciation in the housing market this year, followed by steady appreciation. Given that, you may be wondering if you should move ahead with buying a home this spring. The decision to purchase a home is best made when you do it knowing all the facts and have an expert on your side.
A lot has changed over the past year, and you might be wondering what’s in store for the spring housing market. If you’re planning to sell your house this season, here’s what real estate experts are saying you should keep in mind.
1. Houses That Are Priced Right Are Still Selling
Houses that are updated and priced at their current market value are still selling. Jeff Tucker, Senior Economist at Zillow, says:
“. . . sellers who price and market their home competitively shouldn’t have a problem finding a buyer.”
The need to price your house right is so important today because the market has changed so much over the past year. Danielle Hale, Chief Economist at realtor.com, explains:
“With a smaller pool of buyers today and more competition from other homes on the market, homesellers will likely need to adjust their price expectations in the market this spring.”
While this spring housing market is different than last year’s, sellers with proper expectations who lean on a real estate expert for the best advice on pricing their house well are still finding success. And that’s great news if you’re thinking about selling.
2. Buyers Are Still Out There
As mortgage rates have risen and remain volatile, some buyers have pressed pause on their plans. But there are still plenty of reasons people are buying homes today. Lisa Sturtevant, Chief Economist at Bright MLS, spells out the mindset of today’s buyers:
“For some buyers, higher mortgage rates simply means buying a home is out of the question unless home prices fall. For others, higher mortgage rates will be a hurdle but ultimately will not keep them from getting back into the market after sitting on the sidelines for months.”
That’s why, if you’re interested in selling your house this spring, it’s helpful to work with a real estate agent who can help connect you with those buyers who are ready to purchase a home.
Bottom Line
There are still clear opportunities for sellers this spring. If you’re wondering if it’s the right time to make a move.
A lot has changed over the past year, and you might be wondering what’s in store for the spring housing market. If you’re planning to sell your house this season, here’s what real estate experts are saying you should keep in mind.
1. Houses That Are Priced Right Are Still Selling
Houses that are updated and priced at their current market value are still selling. Jeff Tucker, Senior Economist at Zillow, says:
“. . . sellers who price and market their home competitively shouldn’t have a problem finding a buyer.”
The need to price your house right is so important today because the market has changed so much over the past year. Danielle Hale, Chief Economist at realtor.com, explains:
“With a smaller pool of buyers today and more competition from other homes on the market, homesellers will likely need to adjust their price expectations in the market this spring.”
While this spring housing market is different than last year’s, sellers with proper expectations who lean on a real estate expert for the best advice on pricing their house well are still finding success. And that’s great news if you’re thinking about selling.
2. Buyers Are Still Out There
As mortgage rates have risen and remain volatile, some buyers have pressed pause on their plans. But there are still plenty of reasons people are buying homes today. Lisa Sturtevant, Chief Economist at Bright MLS, spells out the mindset of today’s buyers:
“For some buyers, higher mortgage rates simply means buying a home is out of the question unless home prices fall. For others, higher mortgage rates will be a hurdle but ultimately will not keep them from getting back into the market after sitting on the sidelines for months.”
That’s why, if you’re interested in selling your house this spring, it’s helpful to work with a real estate agent who can help connect you with those buyers who are ready to purchase a home.
Bottom Line
There are still clear opportunities for sellers this spring. If you’re wondering if it’s the right time to make a move.
The housing market has gone through a lot of change recently, and much of that was a result of how quickly mortgage rates rose last year.
Now, as we move through 2023, there are signs things are finally going to turn around. Home price appreciation is slowing from the recent frenzy, mortgage rates are coming down, inflation is easing, and overall market activity is starting to pick up. All of that’s great news for the housing market this year. Here’s what experts are saying.
“. . . it appears a turning point for housing lies ahead. In the coming quarters, single-family home building will rise off of cycle lows as mortgage rates are expected to trend lower and boost housing affordability.”
Bottom Line
If you’re thinking about making a move this year, a turnaround in the housing market could be exactly what you’ve been waiting for.
Spring is usually the busiest season in the housing market. Many buyers wait until then to make their move, believing it’s the best time to find a home. However, that isn’t always the case when you factor in the competition you could face with other buyers at that time of year. If you’re ready to buy a home, here’s why it makes sense to move before the spring market picks up.
Spring Should Bring a Wave of Buyers to the Market
In most years, the housing market goes through predictable seasonal trends in activity. Winter is typically a quiet point in the year, while spring sees a surge of buyers begin their search. And experts project that this year will be no exception.
Right now, buyer demand is low due to a combination of normal seasonal trends and a reaction to last year’s rise in mortgage rates. But rates have started to come down since last November, which has more and more potential buyers planning to jump into the market. That means right now is a sweet spot if you’re in a good position to buy, before more buyers reappear. Affordability is beginning to improve, but demand is still low — for now. Lawrence Yun, Chief Economist at the National Association of Realtors (NAR), shares:
“. . . expect sales to pick up again soon since mortgage rates have markedly declined after peaking late last year.”
If you’re ready to buy a home, right now is the best time to do so before your competition grows and more buyers enter the market.
Today’s Sellers Are Motivated
Low demand from buyers often means sellers are more motivated to work with you, and that can set you up to buy a home on your terms. In fact, sellers have been more willing to negotiate this winter because there are fewer buyers in the market. According to a recent article from Forbes:
“. . . sellers gave concessions to buyers in 41.9% of home sales in the fourth quarter of last year.”
But keep in mind, the advantages buyers have this winter won’t last forever. The competition you face could be greater if you wait until spring to make a move, and increased buyer demand means sellers will have less motivation to negotiate with you. Be sure to work with a trusted real estate professional to learn what you can expect in your local market right now.
Last year, the Federal Reserve took action to try to bring down inflation. In response to those efforts, mortgage rates jumped up rapidly from the record lows we saw in 2021, peaking at just over 7% last October. Hopeful buyers experienced a hit to their purchasing power as a result, and some decided to press pause on their plans.
Today, the rate of inflation is starting to drop. And as a result, mortgage rates have dipped below last year’s peak. Sam Khater, Chief Economist at Freddie Mac, shares:
“While mortgage market activity has significantly shrunk over the last year, inflationary pressures are easing and should lead to lower mortgage rates in 2023.”
That’s potentially great news if you’re a buyer aiming to jump back into the housing market. Any drop in mortgage rates helps boost your purchasing power by bringing down your expected monthly mortgage payment. This means the lower mortgage rates experts forecast this year could be just what you need to reignite your homebuying goals.
While this opens up a window of opportunity for you, remember: you shouldn’t expect rates to drop back down to record lows like we saw in 2021. Experts agree that’s not the range buyers should bank on. Greg McBride, Chief Financial Analyst at Bankrate, explains:
“I think we could be surprised at how much mortgage rates pull back this year. But we’re not going back to 3 percent anytime soon, because inflation is not going back to 2 percent anytime soon.”
It’s important to have a realistic vision for what you can expect this year, and that’s where the advice of expert real estate advisors is critical. You may be surprised by the impact even a mild drop in mortgage rates has on your budget. If you’re ready to buy a home now, today’s market presents the opportunity to get a more affordable mortgage rate, find your dream home, and face less competition from other buyers.
Bottom Line
The recent pullback in mortgage rates is great news – but if you’re ready to buy now, holding out for 3% is a mistake. Work with a local lender to learn how today’s rates impact your goals, and let’s connect to explore your options in New Hampshire and southern Maine.
