If you’re thinking of buying a Boston Seaport home this year, you’re probably paying closer attention than normal to the housing market. And you’re getting your information from a variety of channels: the news, social media, your real estate agent, conversations with friends and loved ones, the list goes on and on. Most likely, home prices and mortgage rates are coming up a lot.
Here are the top two questions you need to ask yourself as you make your decision, including the data that helps cut through the noise.
One reliable place you can turn to for information on home price forecasts is the Home Price Expectations Survey from Fannie Mae – a survey of over one hundred economists, real estate experts, and investment and market strategists.
According to the most recent release, the experts are projecting home prices will continue to rise at least through 2028 (see the graph below):
So, why does this matter to you? While the percent of appreciation may not be as high as it was in recent years, what’s important to focus on is that this survey says we’ll see prices rise, not fall, for at least the next 5 years.
And home prices rising, even at a more moderate pace, is good news not just for the market, but for you too. It means, by buying now, your home will likely grow in value, and you should gain home equity in the years ahead. But, if you wait, based on these forecasts, the home will only cost you more later on.
Over the past year, mortgage rates spiked up in response to economic uncertainty, inflation, and more. But there’s an encouraging sign for the market and mortgage rates. Inflation is moderating, and here’s why this is such a big deal if you’re looking to buy a home.
When inflation cools, mortgage rates generally fall in response. That’s exactly what we’ve seen in recent weeks. And, now that the Federal Reserve has signaled they’re pausing their Federal Funds Rate increases and may even cut rates in 2024, experts are even more confident we’ll see mortgage rates come down.
Danielle Hale, Chief Economist at Realtor.com, explains:
“. . . mortgage rates will continue to ease in 2024 as inflation improves and Fed rate cuts get closer. . . . a key factor in starting to provide affordability relief to homebuyers.”
As an article from the National Association of Realtors (NAR) says:
“Mortgage rates likely have peaked and are now falling from their recent high of nearly 8%. . . . This likely will improve housing affordability and entice more home buyers to return to the market . . .”
No one can say with absolute certainty where mortgage rates will go from here. But the recent decline and the latest decision from the Federal Reserve to stop their rate increases, signals there’s hope on the horizon. While we may see some volatility here and there, affordability should improve as rates continue to ease.
If you’re thinking about buying a home, you need to know what’s expected with home prices and mortgage rates. While no one can say for certain where they’ll go, making sure you have the latest information can help you make an informed decision. Let’s connect so you can stay up to date on what’s happening and why this is such good news for you.
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Ford Realty is located in 137 Charles Street in Beacon Hill
Updated: Boston Condos for Sale Blog 2024
John Ford Boston Beacon Hill Condo Broker 137 Charles Street Boston, MA. 02114
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.
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.”
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.
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.
The big takeaway? The data shows there isn’t cause for concern – there are actually more signs of hope. Let’s connect to talk more about the housing market questions on your mind as we head into the new year.
Updated: Boston Real Estate Blog 2023
Byline – John Ford Boston Beacon Hill Condo Broker 137 Charles St. Boston, MA 02114
Visit our Beacon Hill office at 137 Charles Street, Beacon Hill MA 02114
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Sometimes it can feel like everyone has advice when it comes to buying a Boston condo for sale. While your friends and loved ones may have your best interests in mind, they may also be missing crucial information about today’s Boston real estate market that you need to make your best decision.
Before you decide whether you’re ready to buy a home, you should know how to answer these three questions.
Boston condo prices are one factor that directly impacts how much it will cost to buy a home and how much you stand to gain as a homeowner when prices appreciate.
The graph below shows just how much experts are forecasting prices to rise this year:Continued price appreciation is great news for existing homeowners but can pose a significant challenge if you wait to buy. Using these forecasts, you can determine just how much waiting could cost you. If prices increase based on the average of all forecasts (12.46%), a median-priced home that cost $350,000 in January of 2021 will cost an additional $43,610 by the end of the year. What does this mean for you? Put simply, with home prices increasing, the longer you wait, the more it could cost you.
Another significant factor that should inform your decision is mortgage interest rates. Today’s average rates remain close to record-lows. Much like prices, though, experts forecast rates will rise over the coming months, as the chart below shows:Your monthly mortgage payment can be significantly impacted by even the slightest increase in mortgage rates, which makes the overall cost of the home greater over time when you wait.
The final question is a personal one. Before deciding, you’ll need to understand your motivation to buy a home and why homeownership is an important goal for you. The financial benefits of owning a home are often easier to account for than the many emotional ones.
The 2021 National Homeownership Market Survey shows that six of the nine reasons Americans value homeownership are because of how it impacts them on a personal, aspirational level. The survey says homeownership provides:
- A Sense of Accomplishment
- A Life Milestone
- A Stake in the Community
- Personal Pride
The National Housing & Financial Capability Survey from NeighborWorks America also highlights the emotional benefits of homeownership:Clearly, there’s a value to homeownership beyond the many great financial opportunities it provides. It gives homeowners a sense of pride, safety, security, and accomplishment – which impacts their lives and how they feel daily.
Homeownership is life-changing, and buying a home can positively impact you in so many ways. With any decision this big, it helps to have a trusted advisor by your side each step of the way. If you’re ready to begin your journey toward homeownership, let’s connect to discuss your options and begin your journey.
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