Given that the housing market is evolving, you may be wondering what the forecast is for the near future. If you are looking to buy or sell, this might be a sign for you to do it. Predictions for the housing market show upward momentum and encourage real estate investors. Although it’s impossible to predict which challenges you’ll face, you want to be as ready as you can be. On a positive note, there are many good things to anticipate. In this article, we’ll take some time to examine the market’s current performance. And more so, we will forecast what the coming years will hold. We sought advice from some experts to learn their projections for the future. Let us take a closer look.
Buyers Will Gain Leverage
For years, sellers have been directing buyers. According to the forecast, buyers will take their time making decisions. Although the market has changed to be more buyer-friendly, sellers still hold a lot of power. In the meantime, the Federal Reserve decided to increase its benchmark interest rate by a quarter of a percentage point. A move that was consistent with the predictions of the majority of housing analysts. Long-term mortgages like 30-year fixed-rate mortgages are indirectly changed by a Fed rate increase.
On the other hand, there was good news for home buyers. The median price of an existing home sold fell 0.9% to $375,700 in March from the same month last year.
The sellers are making concessions, but buyers are allowed to buy without waiving contingencies. While some sellers have low mortgage interest rates, they are not under any pressure to sell.
Decline in Home Prices
Compared to last June’s levels, the 2022 peak, Zillow predicts that national home prices will drop by 1% to 4%. This forecast shows that over the following few years, the buyer’s market will continue to strengthen.
“Half of the country may experience small price gains, while the other half may see slight price declines,” Lawrence Yun, NAR chief economist.
As per Freddie Mac, although the downside risks are high, they expect a modest decline in home prices.
Inventory Levels Will Rise
Some areas have fewer homes while others have more than doubled. The market is more dynamic than static, with buyers choosing new listings of homes. Industry experts predict a long wait before inventory returns to normal. Given that 85% of homeowners reportedly have mortgage rates below 6%. Although housing inventory is still below average for markets as of right now, it is rising gradually.
The Bottom Line
We can already see signs of the housing market returning to normalcy. In order to comprehend the implications for the larger economy as the housing market changes, it will be crucial to keep an eye on these trends. Experts predict that although the housing market will continue to be slow, homebuyers will gradually gain stability. This is the time for regular, hardworking buyers to get back in the game if they’ve felt priced out of the market over the past few years.
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