Where Is The Market Heading?

We all see the changes in the real estate market.  Some of us have dealt with them first hand and others are wondering if now is the time to make their move. 

We are here to help answer those questions. 

Let’s take a look at what the experts are saying about what the second half of the year holds for the real estate market. 

Mortgage Rates Will Depend on Inflation

One of the biggest questions on all buyers’ minds is “where are mortgage rates heading?”.  No one can look into the future and tell us exactly what will happen.  What housing market experts can tell us for sure is that the record low mortgage rates during the pandemic were not the norm. 

So far in 2022, the rates have climbed over 2% due to the steady increase of inflation.  If inflation continues to increase, it’s likely that mortgage rates will respond in the same manner.  Greg McBride, Chief Financial Analyst at 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”

What does this mean for buyers and sellers?  Whether you want to purchase your first home or sell your current home to make a move, the right mortgage rate is a very important factor to consider.  When the rates rise, they impact affordability and your purchasing power! Our advice… “Marry the House, Date the Rate”! Within time, interest rates will even out and you will be able to refinance on the home that you purchased.  Why wait to purchase your dream home, when you know that rates aren’t forever!

 

 

Supply of Homes for Sale Projected to Continue to Increase 

This spring the number of homes for sale has increased! That is in part to homeowners selling their homes, but also because the higher mortgage rates have eased the intensity of buyer demand.  As the buyer demand slows down, home inventory will rise.  

Experts are saying that the growth will continue throughout the second part of the year.  In the latest inventory forecast, the projections for inventory gains have increased dramatically - going from a 0.3% at the beginning of 2022 to a 15.0% jump by the end of 2022. (realtor.com)

This is great news!  However, a sudden surplus in homes is not exactly on the horizon for home buyers.  Home inventory is still lower than it has been in recent years and home buyers will have more options than they have over the past two years. 

 

Home Price Forecasts Include Ongoing Appreciation

During the pandemic, there was an imbalance between the number of homes for sale and the number of buyers looking to purchase a home - this led to record-breaking increases in home prices. Corelogic says that homes appreciated by 15% in 2021 and they continue to rise in 2022. 

As the housing supply continues to increase, there are more buyers than there are homes for sale - this continues to put pressure on home prices.  This is what is causing experts to say that prices are not going to decline, instead they are forecasting that they’ll continue to climb.  The climb will luckily be at a more moderate pace over the year.  On average, homes will appreciate by about 8.5% in 2022. 

According to Selma Hepp, Deputy Chief Economist at CoreLogic, the housing market will see deceleration, but not depreciation, in prices.  She explains, “The current home price growth rate is unsustainable, and higher mortgage rates coupled with more inventory will lead to slower home price growth but unlikely declines in home prices.”

Current homeowners don’t fret.  Your home’s value is not projected to fall.  It just means that waiting to purchase your next home does mean your next home could cost you more as home prices continue to appreciate.

 

So…what should you do?

Whether you are looking to purchase a home or sell, staying up to date on all of the market trends, will enable you to make the best decision for you and your family.  

We would love to connect with you to discuss your goals and what lies ahead in terms of our local market, so you can determine the best plan for your move. Reach out to us to schedule a time to discuss your goals at verus@verusnetwork.com or 417-986-4330. 

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Blog Sources:

Keeping Current Matters
Realtor.com

Bankrate

Corelogic