Toward the end of last year, there were several headlines saying home prices would fall substantially in 2023. That led to a lot of fear and questions about whether there would be a repeat of the housing crash that happened back in 2008. But the headlines got it wrong.
While there was a slight home price correction after the sky-high price appreciation during the ‘unicorn’ years, home prices didn’t come crashing down nationally. If anything, prices were a lot more resilient than many people expected. Let’s look at some of the expert forecasts from late last year stacked against their most recent forecasts to show that even the experts recognize they were overly pessimistic.
Expert Home Price Forecasts: Then and Now This visual shows the
Even though activity in the housing market has slowed from the frenzy that was the ‘unicorn’ years, it’s still a seller’s market because the supply of homes for sale is so low. But what does that mean for you? And why are conditions today so good if you want to sell your house?
The latest Existing Home Sales Report from the National Association of Realtors (NAR) shows housing supply is still astonishingly low. The number of available homes on the market measures housing inventory. It’s also measured by months’ supply, meaning the number of months it would take to sell all those available homes based on current demand. In a balanced market, there’s usually about a six-month supply. Today, we have only about three months’ supply of homesat the
Your equity grows as you pay down your home loan and prices increase. With home prices rising again, your equity is getting an extra boost.
Almost half of homeowners are equity-rich because they have at least 50% equity. If you’ve been in your home for a while, you might have also gained a considerable amount of equity.
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Have you ever wondered how inflation impacts the housing market? Believe it or not, they’re connected. Whenever there are changes to one, both are affected. Here’s a high-level overview of the connection between the two.
The Relationship Between Housing Inflation and Overall Inflation
Shelter inflation is the measure of price growth specific to housing. It comes from a survey of renters and homeowners by the Bureau of Labor Statistics (BLS). The survey asks renters how much they’re paying in rent and homeowners how much they’d rent their homes for if they weren’t living in them. Much like overall inflation measures the cost of everyday items, shelter inflation measures the cost of housing. And for four consecutive months, based on that
Even though you may feel reluctant to sell your house because you don't want to take on a higher mortgage rate than the one you have now, there's more to consider. While the financial side of things does matter, your personal needs may matter just as much. As an article from Bankrate says:
"Deciding whether it's the right time to sell your home is a personal decision. There are numerous important questions to consider, both financial and lifestyle-based, before putting your home on the market."
So, ask yourself this: Why did I want to move in the first place?
Your primary motivation wasn't just financial. Why you're thinking about selling has more to do with something changing in your life or a shift in what you need out of your
If you’re following mortgage rates because you know they impact your borrowing costs, you may be wondering what the future holds for them. Unfortunately, there’s no easy way to answer that question because mortgage rates are notoriously hard to forecast.
But, there’s one thing that’s historically a good indicator of what’ll happen with rates, and that’s the relationship between the 30-Year Mortgage Rate and the 10-Year Treasury Yield. Here’s a graph showing those two metrics since Freddie Mac started keeping mortgage rate records in 1972:
As the graph shows, historically, the average spread between the two over the last 50 years was 1.72 percentage points (also commonly referred to as 172 basis points). If you look
The National Association of Realtors (NAR) Is set to release its most recent existing home sales (EHS) report tomorrow. This monthly release provides information on the volume of sales and price trends for homes that have previously been owned. In the upcoming release, it’lllikely say home prices are down. This may seem a bit confusing, especially if you’ve been following along and reading the blogs saying home prices have hit bottom and have since rebounded.
So, why would this say home prices are falling when so many other price reports say they’re going back up? It all depends on the methodology of each one. NAR reports on the median home sales price, while some other sources use repeat sales prices. Here’s how those approaches differ.
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Want to know what experts say will happen in the rest of 2023? Home prices are already appreciating again in many areas. The average of the expert forecasts shows positive price growth.
Where mortgage rates go for the rest of the year will depend on inflation. Based on historical trends, rates are likely to ease as inflation continues to cool.
Even though low inventory continues to be a challenge, experts project 5 million homes will still sell this year. That pace should pick up if rates come down.
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