Thinking about buying a home?
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Thinking about buying a home?
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
The idea of owning a home has always been a big part of the American Dream. It’s a symbol of stability, independence, and having a place to truly call your own. But for Gen Z, the “Zoomers” born between 1997 and 2012, making that dream a reality can feel like quite the challenge today with higher mortgage rates and rising home prices.
But achieving that goal of owning your first home can still be attainable, even today, with some strategic planning and resourcefulness.
With prices rising all around you, it can be hard to save up for a home. If you’ve been struggling to stash away enough cash for that down payment, it’s worth it to look into the various down payment assistance programs available. These programs can really help you save big on the upfront costs of buying a home.
There are a lot more options out there than you may realize. According to Down Payment Resource, there are over 2,000 programs designed to help hopeful homebuyers with down payments and closing costs.
If you qualify for one of these programs, you may not need to save up as much money for your down payment. A local real estate agent can help you explore these programs in your area, making it much easier to turn your homeownership dream into a reality.
If you still need a bit more time to save, even with the down payment assistance programs out there, there are ways you can make that happen. Many savvy Zoomers have made a strategic choice to live with relatives so they can get to their savings goals even faster.
According to the National Association of Realtors (NAR), around 30% of Gen Z homebuyers transition directly from their relative’s home to a home of their own.
By sharing living costs, such as mortgage payments, utility bills, and even grocery expenses, you can substantially reduce your monthly expenses. This frees up more of your income to tackle any outstanding debt, boost your credit score, and reach your down payment target in less time. And, all of this can bring homeownership one step closer to becoming a reality. Clare Trapasso, Executive News Editor at Realtor.com, explains:
“Faced with ongoing housing affordability issues . . . we’re seeing parents and children becoming roommates again in later years as the ‘kids’ save up to purchase their own place . . .”
When you’re on the path to becoming a homeowner, it’s a good idea to get some help along the way. And one of your best resources on this journey as a young homebuyer is a trusted real estate agent. They’ll steer you through the process of buying a home and help you find one you can afford.
For Gen Z, the path to homeownership may not be straightforward, but it’s still within reach. With the right strategies, you can turn your dream of owning a home into a reality.
Are you wondering if it makes sense to buy a home right now? While today’s mortgage rates might seem a bit intimidating, here are two compelling reasons why it still may be a good time to become a homeowner.
There’s been a lot of confusion around what’s happened with home prices over the past two years. While they did dip ever so slightly in late 2022, this year they’ve been appreciating at a more normal pace, which is good news for the housing market. And while looking at price movement over just a year or two can make you worry prices are usually this unpredictable, history shows in the long run, home values rise (see graph below):
Using data from the Federal Reserve for the past 60 years, you can see the overall trend is home prices have climbed quite steadily. Sure, there was an exception around the housing crash of 2008 that caused prices to break the usual trend for a time, but overall, home values have been consistently on the rise.
Increasing home values is one great reason why buying may make more sense than renting. As prices rise, and as you pay down your mortgage, you build equity. Over time, that growing equity gives your net worth a boost.
Another reason you may want to consider buying a home instead of renting is the never-ending rent hike. If you’ve ever felt the pinch of rent increasing year after year, you’re not alone. That’s because, rents have climbed steadily over the past six decades (see graph below):
By buying a home, you can lock in your monthly housing costs and bid farewell to those pesky rent hikes. That stability is a game-changer.
In the end, it all boils down to this: your housing payments are an investment, and you’ve got a choice to make. Do you want to invest in yourself or your landlord?
By becoming a homeowner, you’re investing in your own future. When you rent, that’s money you never get back.
When you factor in home values consistently rising, plus the opportunity to get relief from never-ending rent hikes, homeownership can be a path to financial security. As Dr. Jessica Lautz, Deputy Chief Economist and VP of Research at the National Association of Realtors (NAR), states:
“If a homebuyer is financially stable, able to manage monthly mortgage costs and can handle the associated household maintenance expenses, then it makes sense to purchase a home.”
When it comes down to it, buying a home offers more benefits than renting, even when mortgage rates are high. If you want to avoid increasing rents and take advantage of long-term home price appreciation, connect with a local real estate agent to go over your options.
If you’ve ever dreamed of buying your own place, or selling your current house to upgrade, you’re no stranger to the rollercoaster of emotions changing home prices can stir up. It’s a tale of financial goals, doubts, and a dash of anxiety that many have been through.
But if you put off moving because you’re worried home prices might drop, make no mistake, they’re not going down. In fact, it’s just the opposite. National data from several sources says they’ve been going up consistently this year (see graph below):
Here’s what this graph shows. In the first half of 2022, home prices rose significantly (the green bars on the left side of the graphs above). Those increases were dramatic and unsustainable.
So, in the second half of the year, prices went through a correction and started dipping a bit (shown in red). But those slight declines were shallow and short-lived. Still, the media really focused on those drops in their headlines – and that created a lot of fear and uncertainty among consumers.
But here’s what hasn’t been covered fully. So far in 2023, prices are going up once more, but this time at a more normal pace (the green bars on the right side of the graphs above). And after price gains that were too high and then the corrections that followed in 2022, the fact that all three reports show more normal or typical price appreciation this year is good news for the housing market.
Orphe Divounguy, Senior Economist at Zillow, explains changing home prices over the past 12 months this way:
“The U.S. housing market has surged over the past year after a temporary hiccup from July 2022-January 2023. . . . That downturn has proven to be short lived as housing has rebounded impressively so far in 2023. . .”
Looking ahead, home price appreciation typically starts to ease up this time of year. As that happens, there’s some risk the media will confuse slowing price growth (deceleration of appreciation) with home prices falling (depreciation). Don’t be fooled. Slower price growth is still growth.
One reason why home prices are going back up is because there still aren’t enough homes for sale for all the people who want to buy them.
Even though higher mortgage rates cause buyer demand to moderate, they also cause the supply of available homes to go down. That’s because of the mortgage rate lock-in effect. When rates rise, some homeowners are reluctant to sell and lose their current low mortgage rate just to take on a higher one for their next home.
So, with higher mortgage rates impacting both buyers and sellers, the supply and demand equation of the housing market has been affected. But since there are still more people who want to purchase homes than there are homes available to buy, prices continue to rise. As Freddie Mac states:
“While rising interest rates have reduced affordability—and therefore demand—they have also reduced supply through the mortgage rate lock-in effect. Overall, it appears the reduction in supply has outweighed the decrease in demand, thus house prices have started to increase . . .”
If you put off moving because you were worried that home prices might go down, data shows they’re increasing across the country. Work with a local real estate agent to understand how home prices are changing in your local area.
During the fourth quarter of last year, some housing experts projected home prices were going to crash in 2023. The media ran with those forecasts and put out headlines calling for doom and gloom in the housing market. All of this negative news coverage made a lot of people have doubts about the strength of the residential real estate market.
If it made you question if you should delay your own plans to move, here’s what you really need to know.
Disregard what you saw in the headlines. The actual data shows home prices were remarkably resilient and performed far better than the media would have you believe (see graph below):
This graph uses reports from three trusted sources to clearly illustrate prices have already rebounded after experiencing only slight declines nationally. That’s a far cry from the crash so many articles called for.
The declines that did happen (shown in red), weren’t drastic but were short-lived. As Nicole Friedman, a reporter at the Wall Street Journal (WSJ), says:
“Home prices aren’t falling anymore. . . The surprisingly quick recovery suggests that the residential real-estate downturn is turning out to be shorter and shallower than many housing economists expected . . .”
Even though some media coverage made a big deal about home prices pulling back, the slight correction that happened is already in the rearview mirror. Basically, this data shows you home prices aren’t falling anymore – they’re actually going back up.
The consensus from experts is that home price growth will continue in the years ahead and is returning to normal levels for the market. That means we’ll still see home prices appreciating, just at a slower pace than the last few years – and that’s a good thing.
Some news sources will see home price growth slowing and put out stories that make you think prices are falling again. The return of misleading headlines like those is already having an impact on how homebuyers are feeling again. You can see how this affects general opinion in the Consumer Confidence Survey from Fannie Mae (see graph below):
While the percentage of Americans who think prices will fall has been slowly declining this year, the latest Consumer Confidence data indicates that’s ticked back up recently (shown in red). This change is surprising especially since the home price data shows prices are going up, not down. It tells you the impact the media still has on public opinion.
Don’t fall for the negative headlines and become part of this statistic. Remember, data from a number of sources shows home prices aren’t falling anymore.
Even though the media may make things sound doom and gloom, the data shows home prices aren’t falling anymore. So, don’t let the headlines scare you or delay your plans. Lean on a real estate professional so you have a trusted resource to cut through the noise and tell you what’s really happening in your area.