Housing Market Forecasts: What's In Store for Home Buyers and Sellers?
Jun 25, 2024
“Gain insight into market forecasts for effective buying and selling experience”
Whether you're a homeowner thinking about selling, or a buyer looking to purchase property, having insight into where the housing market is headed can help you make informed decisions. Let's look at some key housing market predictions for the coming years:
Mortgage Rates Projected to Keep Rising
One of the biggest factors impacting home affordability is mortgage rates. After hitting historical lows during the pandemic, rates have been climbing steadily. The 30-year fixed mortgage rate surpassed 7% in late 2022.
Most forecasts show mortgage rates continuing their upward trajectory in 2023, with the potential to approach 8% by the end of the year. Higher borrowing costs reduce spending power for buyers, which puts downward pressure on home prices.
Home Price Growth Expected to Slow
Rapid home price appreciation was a defining trend during the pandemic frenzy. However, many experts predict the rate of price growth will decelerate over the next couple of years as higher mortgage rates make homes less affordable..
While outright price declines can't be ruled out in some overheated markets, most economists anticipate home prices plateauing nationally rather than a major crash. Price growth is projected to slow to around 2-5% annually in 2023 and 2024 after the double-digit increases seen during the pandemic.
Existing Home Sales May Decline Further
Rising mortgage rates coupled with high prices have already impacted existing home sales, which fell over 30% year-over-year in late 2022. Most housing forecasts call for further declines of 6-10% in existing home sales through 2023 as elevated borrowing costs price some buyers out. However, a lack of housing inventory in many markets could provide a floor on how existing home sales pull back from their early pandemic peaks.
No Housing Bust Like 2008 Anticipated
While economic conditions are expected to continue posing headwinds for the housing market, most analysts don't foresee a catastrophic housing bust reminiscent of 2008. More stringent lending standards have helped prevent speculation and overleveraging in the housing sector. Instead, the consensus among economists points to a relatively orderly housing market "reset" and transition to a higher mortgage rate environment rather than a disastrous crash.
Both buyers and sellers need to stay attuned to these housing forecasts. While price appreciation may moderate, limited inventory could keep the overall market fairly competitive. And mortgage rates will continue playing a pivotal role in impacting affordability. The key is being prepared to act during optimal market windows for one's specific goals and situation. Use estateagentpower.com for your property needs, news and updates.
