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Experts Project Home Prices Will Rise over the Next 5 Years

Posted on December 4, 2023 by - Buying Myths, For Buyers, For Sellers, Housing Market Updates, Selling Myths

Experts Project Home Prices Will Rise over the Next 5 Years Simplifying The Market

Even with so much data showing home prices are actually rising in most of the country, there are still a lot of people who worry there will be another price crash in the immediate future. In fact, a recent survey from Fannie Mae shows that 23% of consumers think prices will fall over the next 12 months. That’s nearly one in four people who are dealing with that fear – maybe you’re one of them.

To help ease that concern, here’s what the experts say will happen with home prices not just next year, but over the next five years.

Experts Project Ongoing Appreciation

While seeing a small handful of expert opinions may not be enough to change your mind, hopefully, a larger group of experts will reassure you. Here’s that larger group.

The Home Price Expectation Survey (HPES) from Pulsenomics is a great resource to show what experts forecast for home prices over a five-year period. It includes projections from over 100 economists, investment strategists, and housing market analysts. And the results from the latest quarterly release show home prices are expected to go up every year through 2027 (see graph below):

 

And while the projected increase in 2024 isn’t as large as 2023, remember home price appreciation is cumulative. In other words, if these experts are correct after your home’s value rises by 3.32% this year, it should go up by another 2.17% next year.

If you’re worried home prices are going to fall, here’s the big takeaway. Even though prices vary by local area, experts project they’ll continue to rise across the country for years to come at a pace that’s more normal for the market.

What Does This Mean for You?

If you’re not convinced yet, maybe these numbers will get your attention. They show how a typical home’s value could change over the next few years using the expert projections from the HPES. Check out the graph below:

 

In this example, let’s say you bought a $400,000 home at the beginning of this year. If you factor in the forecast from the HPES, you could potentially accumulate more than $71,000 in household wealth over the next five years.

Bottom Line

If you’re someone who’s worried home prices are going to fall, rest assured a lot of experts say it’s just the opposite – nationally, home prices will continue to climb not just next year, but for years to come. If you have any questions or concerns about what’s next for home prices in your local area, connect with a real estate agent.

Are the Top 3 Housing Market Questions on Your Mind?

Posted on November 28, 2023 by - Buying Myths, First Time Home Buyers, For Buyers, For Sellers, Housing Market Updates, Move-Up Buyers, Selling Myths

Are the Top 3 Housing Market Questions on Your Mind? Simplifying The Market

When it comes to what’s happening in the housing market, there’s a lot of confusion going around right now. You may hear one thing in conversation with your friends, see something totally different on the news, and read something on social media that contradicts both of those thoughts. And, if you’re thinking about making a move, that can leave you with a lot of lingering questions. That’s where a trusted local real estate agent comes in.

Here are the top 3 questions people are asking about today’s housing market, and the data to help answer them.

1. What’s Next for Mortgage Rates?

Mortgage rates are higher than they’ve been in recent years. And, if you’re looking to buy a home, that impacts how much you can afford. That’s why so many buyers want to know what’s ahead for mortgage rates. The answer to that question is: no one can say for certain, but here’s what we know based on historical trends.

There’s a long-standing relationship between mortgage rates and inflation. Basically, when inflation is high, mortgage rates tend to follow suit. Over the past year, inflation was up, so mortgage rates were as well. But inflation is easing now. And this is why the Federal Reserve has recently paused their federal funds rate hikes, which means many experts believe mortgage rates will begin to come down.

And in some ways, we’ve started to see hints of slightly lower mortgage rates in recent weeks. But it’s certainly been volatile and will likely continue to be that way going into next year. Some ongoing variation is to be expected, but the anticipation is, that in 2024, we’ll see a downward trend. 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 Headed?

While there’s been a lot of concern prices would come crashing down this year, data shows that didn’t happen. In fact, home prices are rising in most of the nation. Experts say that trend will continue, just at a slower pace that’s much more normal for the housing market – and that’s a good thing.

To help show just how confident experts are in this continued appreciation, take a look at the Home Price Expectation Survey from Pulsenomics. It’s a survey of a national panel of over 100 economists, real estate experts, and investment and market strategists. As the graph below shows, the consensus is, that prices will keep climbing next year, and in the years to come.

 

3. Is a Recession Around the Corner?

While recession talk has been a common thing over the past few years, there’s good news on that front.

The Wall Street Journal (WSJ) polls experts on this topic regularly. And last year at this time, most of them thought a recession would have happened by now. But as experts look at all the leading indicators today, they’re changing their minds and saying a recession is getting less and less likely. The latest results show that more experts now think we’re not headed for another recession (see chart below):

 

This is big news for the housing market. And while the 48% to 52% split may seem close to half and half, the key thing to focus on is that the majority of these experts think we’ve avoided a recession already.

Bottom Line

The big takeaway? The data shows there isn’t cause for concern – there are actually more signs of hope. Reach out to a local real estate agent to talk more about the housing market questions on your mind heading into the new year. 

Home Prices Still Growing – Just at a More Normal Pace

Posted on November 22, 2023 by - For Buyers, For Sellers, Housing Market Updates, Pricing

Home Prices Still Growing – Just at a More Normal Pace Simplifying The Market

If you’re feeling a bit muddy on what’s happening with home prices, that’s no surprise. Some people are still saying prices are falling, even though data proves otherwise. Part of that misconception is because people are getting their information from unreliable sources. But it’s also coming from some media coverage misrepresenting what the data really shows.

So, to keep things simple, here’s what you really need to know using real data you can trust.

Normal Home Price Seasonality Explained

In the housing market, there are predictable ebbs and flows that happen each year. It’s called seasonality. Spring is the peak homebuying season when the market is most active. That activity is typically still strong in the summer but begins to wane as the cooler months approach.

Home prices follow along with seasonality because prices appreciate most when something is in high demand. That’s why there’s a reliable long-term home price trend. The graph below uses data from Case-Shiller to show the typical percent change for monthly home price movement from 1973 through 2022 (not adjusted, so you can see the seasonality):

 

As the data shows, at the beginning of the year, home prices grow, but not as much as they do when entering the spring and summer markets. That’s because the market is less active in January and February since fewer people move in the cooler months. As the market transitions into the peak homebuying season in the spring, activity ramps up, and home prices go up a lot more in response. Then, as fall and winter approach, prices still grow, just at a slower pace as activity eases again.

This Year, Seasonality Has Returned

Now, let’s look at how this year compares to that long-term trend (see graph below):

 

Here’s the latest data for this year from that same source. Just like before, the dark bars are the long-standing trend. The green bars represent what’s happened this year. As you can see, the green bars are beginning to fall in line with what’s normal for the market. That’s a good thing because it’s more sustainable price growth than we’ve seen in recent years.

In a nutshell, nationally prices aren’t falling, it’s just that price growth is beginning to normalize. Moving forward, there’s a chance the media will misrepresent this slowing of home price growth as prices falling. So don’t believe everything you see in the headlines. The data included here gives you the context you need to really understand what’s happening. So, if you see something in the headlines that’s confusing, don’t just take it at face value. Ask a trusted real estate professional for more information.

Remember, it’s normal to see home price growth slow down as the year goes on. And that definitely doesn’t mean home prices are falling. They’re just rising at a more moderate pace.

Bottom Line

Home price appreciation is returning to normal seasonality and that’s a good thing. If you have questions about what’s happening with prices in your local area, connect with a real estate professional.

Are There Actually More Homes for Sale Right Now?

Posted on November 21, 2023 by - Buying Myths, For Buyers, For Sellers, Housing Market Updates, Selling Myths

Are There Actually More Homes for Sale Right Now? Simplifying The Market

If you’re looking to make a move, you want to be sure you have the latest information on the housing market. To help make that possible, here’s an update on the supply of homes for sale today. Whether you’re looking to buy or sell, the number of homes available in your local market matters to you. Take a look below.  

What’s the Truth About Today’s Housing Inventory?

While the story for the past few years has been how few homes are on the market, recent national data may leave you feeling a bit confused. That’s because Realtor.com shows inventory is actually growing a bit month-over-month in many parts of the country (see the blue states in the map below):

As the map shows, nationally, housing supply increased just over 5% last month.

Does That Mean the Days of Limited Inventory Are Over?

That might make you wonder: are the days of tight housing supply behind us? The short answer is no. Context is important. While you may see headlines saying inventory is up, data also shows there are still significantly fewer homes for sale than there would usually be in a more normal market.

The graph below compares the latest active listing counts (homes currently available for sale) with the most recent normal years in the housing market (2017-2019):

As Lance Lambert, Founder, ResiClub Analytics, explains:

“Housing market inventory is so far below pre-pandemic levels that October’s big jump is still just a drop in the bucket.”

What does that mean for you? Remember, real estate is hyper-local. Partnering with a trusted real estate agent will help you gain a better understanding of the inventory situation in your specific market.

If you’re looking to buy, you may have slightly more options than you did in recent months, but you still need to brace for low inventory. A great agent will be able to share their expertise and key strategies that have helped other buyers navigate today’s ongoing low housing supply.

And, if you’re trying to sell, rest assured you haven’t missed your window of opportunity to potentially get multiple offers or see your house sell quickly. While inventory has ticked up some nationally, overall, it’s still low and may be down even more in your area. 

Bottom Line

If you’re looking to buy or sell a home, connect with a local real estate agent so you can make sure you’re up to date on all the latest trends that could impact your move, including today’s housing supply. 

Is Your House the Top Thing on a Buyer’s Wish List this Holiday Season?

Posted on November 20, 2023 by - For Sellers, Selling Myths

Is Your House the Top Thing on a Buyer’s Wish List this Holiday Season? Simplifying The Market

This time every year, homeowners who are planning to move have a decision to make: sell now or wait until after the holidays? Some sellers with homes already on the market may even remove their listing until the new year.

But the truth is, many buyers want to purchase a home for the holidays, and your house might be just what they’re looking for. As an article from Fortune Builders explains:

“ . . . while a majority of people take a step back from the real estate market during the holiday months, you may find when the temperature drops, your potential for a great real estate deal starts to rise.”

To help prove that point, here are four reasons you shouldn’t wait to sell your house.

1. The desire to own a home doesn’t stop during the holidays. While a few buyers might opt to delay their moving plans until January, others may need to move now because something in their life has changed. The buyers who look for homes at this time of year are usually motivated to make their move happen and are eager to buy. A recent article from Investopedia says:

“Anyone shopping for a new home between Thanksgiving and New Year’s is likely going to be a serious buyer. Putting your home on the market at this time of year and attracting a serious buyer can often result in a quicker sale.”

2. While the supply of homes for sale has increased a little bit lately, overall inventory is still lower than it was before the pandemic. What does that mean for you? If you work with an agent to price your house at market value, it could still sell quickly because today’s buyers are craving more options – and your home may be exactly what they’re searching for.

3. You can determine the days and times that are most convenient for you for home showings. That can help you minimize disruptions to your own schedule, which can be especially important during this busy time of year. Plus, you may find buyers are more flexible on when they’ll tour a house this time of year because they have more time off from work around the holidays.

4. And finally, homes decorated for the holidays appeal to many buyers. For those buyers, it’s easy to picture gathering with their loved ones in the home and making memories of their own. An article on selling at this time of year offers this advice:

“If you’re selling around a holiday and have decorations up, make sure they accent—not overpower—a room. Less is more.”

Bottom Line

There are plenty of good reasons to put your house on the market during the holiday season. Connect with a real estate agent and see if it’s the right time for you to sell.

People Are Still Moving, Even with Today’s Affordability Challenges

Posted on November 16, 2023 by - Buying Myths, For Buyers, For Sellers, Housing Market Updates, Selling Myths

People Are Still Moving, Even with Today’s Affordability Challenges Simplifying The Market

If you’re thinking about buying or selling a home, you might have heard that it’s tough right now because mortgage rates are higher than they’ve been over the past few years, and home prices are rising. That much is true. Take a look at the graph below. It breaks down how the current affordability situation stacks up to recent years.

 

The National Association of Realtors (NAR) explains how to read the values on the graph:

“To interpret the indices, a value of 100 means that a family with the median income has exactly enough income to qualify for a mortgage on a median-priced home.”

The black dotted line represents that 100 value on the index. Essentially, the higher the bar, the more affordable homes are. As you can see, the orange bar for today shows higher mortgage rates and home prices have created a clear challenge. But, while affordability is definitely tighter right now, that doesn’t mean the housing market is at a standstill.

According to NAR, based on the pace of sales right now, just under 4 million homes will sell this year. With some simple math, let’s break down what that really means for you:

  • 3.96 million homes divided by 365 days in a year = 10,849 houses sell each day
  • 10,849 divided by 24 hours in a day = 452 houses sell per hour
  • 452 divided by 60 minutes in an hour = about 8 houses sell each minute

So, on average, over 10,000 homes sell each day in this country. Whether you’re a buyer or a seller, this goes to show there are still ways to make your move possible, even at a time when affordability is tight.

An Agent Can Help You Make Your Move a Reality

You may be wondering how other homebuyers and sellers are making this happen now. One of the biggest game-changers in today’s market is working with a trusted local real estate agent. Great agents are helping other people just like you navigate today’s market and the current affordability situation, and their insight is invaluable right now.

True professionals will be able to offer advice tailored to your specific wants, needs, budget, and more. Not to mention, they’ll also be able to draw on their experience of what’s working for other buyers and sellers right now. This could mean broadening your search, if needed, to include other housing types like condos, townhouses, or neighborhoods a bit further out to help offset some of the affordability challenges today. 

Bottom Line

You might think there aren’t many people buying or selling homes right now since affordability is tighter than it’s been in quite some time, but that’s not the case. It’s true that buying a home has become more expensive over the past couple of years, but people are still moving.

 

If you’re hoping to buy or sell a home today, know that other people are still making their goals a reality – and that’s happening in large part because of the help and advice of skilled real estate agents. Want to talk to a trusted professional about your own move? Connect with a local real estate agent.  

The Latest 2024 Housing Market Forecast

Posted on November 15, 2023 by - For Buyers, For Sellers, Housing Market Updates, Pricing

The Latest 2024 Housing Market Forecast Simplifying The Market

The new year is right around the corner, and you might be wondering if 2024 will be the right time to buy or sell a home. If you want to make the most informed decision possible, it’s important to know what the experts have to say about what’s ahead for the housing market. Spoiler alert: the projections may be better than you think. Here’s why.

Experts Forecast Ongoing Home Price Appreciation

Take a look at the latest home price forecasts from Fannie Mae, the Mortgage Bankers Association (MBA), and the National Association of Realtors (NAR):

 

As you can see in the orange bars on the left, on average, experts forecast prices will end this year up about 2.8% overall, and increase by another 1.5% by the end of 2024. That’s big news, considering so many people thought prices would crash this year. The truth is, prices didn’t come tumbling way down in 2023, and that’s because there just weren’t enough homes for sale compared to the number of people who wanted or needed to buy them, and that inventory crunch is still very real. This is the general rule of supply and demand, and it continues to put upward pressure on prices as we move into the new year.

Looking forward, experts project home prices will continue to rise next year, but not quite as much as they did this year. Even though the expected rise in 2024 isn’t as big as in 2023, it’s important to understand home price appreciation is cumulative. In simpler terms, this means if the experts are right, according to the national average, after your home’s value goes up by 2.8% this year, it should go up by another 1.5% next year. That ongoing price growth is a big part of why owning a home can be a smart decision in the long run.

Projections Show Sales Should Increase Slightly Next Year

While 2023 hasn’t seen a lot of home sales relative to more normal years in the housing market, experts are forecasting a bit more activity next year. Here’s what those same three organizations project for the rest of this year, and in 2024 (see graph below):

 

While expectations are for just a slight uptick in total sales, improved activity next year is a good thing for the housing market, and for buyers and sellers like you. As people continue to move, that opens up options for hopeful buyers who are looking for a home.

So, what do these forecasts show? The housing market is expected to be more active in 2024. That may be in part because there will always be people who need to move. People will get new jobs, have children, get married or divorced – these and other major life changes lead people to move regardless of housing market conditions. That will remain true next year, and for years to come. And if mortgage rates come down, we’ll see even more activity in the housing market.

Bottom Line

If you’re thinking about buying or selling, it’s important to know what the experts are forecasting for the future of the housing market. When you’re in the know about what’s ahead, you can make the most informed decision possible. Connect with a local real estate agent to chat about the latest forecasts, and craft a plan for your next move.

These Top Cities Show Home Prices Are Still Climbing

Posted on November 14, 2023 by - For Buyers, For Sellers, Housing Market Updates, Pricing

These Top Cities Show Home Prices Are Still Climbing Simplifying The Market

If you’re considering buying a home or selling your current one to find something that better suits your needs, you may have questions about what’s happening with home prices today. Here’s what you need to know.

There’s still a lot of confusion and misinformation out there. So, no matter what you may have heard, the national data shows they’ve actually been climbing again (see graphs below):

 

As you can see, in the first half of 2022, home prices went way up. Those increases were dramatic and unsustainable. So, in the second half of 2022, prices adjusted. Those dips were small and didn’t last very long. Still, the news made a big deal about these slight declines, which may have made you worry.

But what’s important to know is that, in 2023, prices are going up again, and this time it’s at a more normal pace. The fact that all three reports now show more typical price increases this year is good news for the housing market.

Home Prices Are Rising Across the Top Cities in the U.S.

After seeing steady home price growth at the national level for the last several months, you may wonder if prices are going up in your local area, too. Know this: while this will vary from one area to the next, home prices are appreciating in these top cities Case-Shiller reports on in their monthly price index (see chart below):

 

That’s why so many experts are able to forecast home prices will end the year in the positive and continue going up in 2024.

Here’s How This Affects You

  • For Buyers: If you’ve been waiting to buy a home because you were concerned it might lose value, the fact that home prices are going up should ease your worries. Buying a home before prices climb higher can be a smart move since home values typically appreciate over time.
  • For Sellers: If you’ve been postponing selling your house because you were worried about how changing home prices would affect its value, now might be a good time to work with a real estate agent to put your house on the market. You don’t have to wait any longer because the data shows home prices are in your favor.

Bottom Line

If you delayed moving because you were concerned home prices could drop, don’t worry – the numbers show they’re going up nationally. To better understand how home prices are changing in your neighborhood, team up with a local real estate agent.

Reasons To Sell Your House Before the New Year

Posted on November 6, 2023 by - For Sellers, Selling Myths

Reasons To Sell Your House Before the New Year Simplifying The Market

As the year winds down, you may have decided it’s time to make a move and put your house on the market. But should you sell now or wait until January? While it may be tempting to hold off until after the holidays, here are three reasons to make your move before the new year.

Get One Step Ahead of Other Sellers

Typically, in the residential real estate market, homeowners are less likely to list their houses toward the end of the year. That’s because people get busy around the holidays and sometimes deprioritize selling their house until the start of the new year when their schedules and social calendars calm down. But that gives you an opportunity to get one step ahead.

Selling now, while other homeowners may hold off until after the holidays, can help you get a leg up on your competition. Start the process with a real estate agent today so you can get your house on the market before your neighbors do.

Get Your House in Front of Eager Buyers 

Even though the supply of homes for sale did grow compared to last year, it’s still low. That means there aren’t enough homes on the market today. While some buyers may also delay their plans to move until January, others will still need to move for personal reasons or because something in their life has changed.

Those buyers are still going to be active later this year and will be seriously motivated to make their move happen because they need to. Unfortunately, the challenge they’ll face is a shortage of available inventory to meet their needs. A recent article from Investopedia says:

“. . . if your house is up for sale in the winter and someone is looking at it, chances are that person is serious and ready to buy. Anyone shopping for a new home between Thanksgiving and New Year’s is likely going to be a serious buyer. Putting your home on the market at this time of year and attracting a serious buyer can often result in a quicker sale.”

Use Your Equity To Fuel Your Move

Keep in mind that homeowners today have record amounts of equity. According to CoreLogic, the average amount of equity per mortgage holder has climbed to almost $290,000. That means the equity you have in your house right now could cover some, if not all, of a down payment on the home of your dreams.

And as you weigh the reasons to sell before year-end, it’s important to remember the reasons that sparked your desire to move in the first place. Maybe it’s time for a new home in a location that suits you better, one that offers the perfect space for you and your loved ones, or maybe your needs have evolved over time. A local real estate agent can help you determine how much home equity you have and how you can use it to achieve your goal of making a move.

Bottom Line

Listing your home before the new year can offer unique benefits. Less competition, motivated buyers, and your equity gains can all play to your advantage. Reach out to a local real estate agent to achieve your goals before winter sets in.

Is It Time To Sell Your Second Home?

Posted on January 12, 2023 by - For Sellers, Housing Market Updates, Luxury Market

Is It Time To Sell Your Second Home? Simplifying The Market

During the pandemic, second homes became popular because of the rise in work-from-home flexibility. That’s because owning a second home, especially in the luxury market, allowed those homeowners to spend more time in their favorite places or with different home features. Keep in mind, a luxury home isn’t only defined by price. In a recent article, Investopedia shares additional factors that push a home into this category: location, such as a home on the water or in a desirable city, and features, the things that make the home itself feel luxurious.