It seems the only thing certain about the housing market right now is the uncertainty of it.

You may hear one thing on the news, read something different on social media, then have a conversation with friends that contradicts both.

I certainly don’t pretend to have all the answers, but did want to share a few thoughts about the 3 topics I receive questions about most often.

1) Where are Mortgage Rates Heading?

Mortgage rates directly impact how much home you can afford, more so than home prices. With mortgage rates at the highest level they have been in years, causing affordability to fall to record lows, it’s no wonder potential home buyers want to know what’s ahead for mortgage rates.

While nobody know for sure what mortgage rates will do, historically there’s a relationship between mortgage rates and inflation. When inflation is high, mortgage rates tend to follow.

Inflation has been easing, which is why the Federal Reserve has paused raising the federal funds rate, leading many experts to believe mortgage rates will continue the downtrend trend we have seen over the past couple of weeks.

As Aziz Sunderji, Strategist at Home Economics, says:

“The bottom line is that 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 Heading?

The million dollar question!

While there was widespread speculation, and numerous forecasts, that home prices would come crashing down in 2023, it didn’t happen.

While prices here in Frisco remain below their April 2022 peak, they are up year-over-year.

The current forecasts are for home prices to continue increasing in 2024, but at a slower pace that’s closer to historical norms.

The Home Price Expectation Survey from Pulsenomics is a survey of a national panel of over 100 economists, real estate experts, and investment and market strategists. Here is a graph showing the national home price appreciation expectations over the next several years:

3) Is the Economy Heading for a Recession?

Concerns about the economy is the other question holding many potential buyers back. While talk of a recession has been common over the past couple of years, leading economists are becoming more positive.

The Wall Street Journal routinely polls the experts on this topic. Last year, the majority belief was that we would be in a recession by now. Now, as the experts look at the latest leading indicators they’re changing their mind and believe a recession is less likely.

While 48% to 52% is nearly an equal split, the takeaway is more experts than not believe we will avoid going into a recession.

The best way to keep track of what’s happening in local real estate market is with my weekly market report. This market report allows you to see the latest trends for any city/zip code in the country and provides you the information you need specific to the area you are most interested in.

Bottom Line

If the past couple of years have shown us anything it’s that nobody knows for sure what the future holds. Everyone’s situation is different. If you’d like more information on the local real estate market, or have a specific situation you’d like to discuss further, I invite you to Schedule a Call. While now isn’t the right time for everyone to buy, there are some unique opportunities for those in a position to take advantage of them.