Future Outlook for Home Prices and Mortgage Rates

If you're considering a move this year, two key factors likely on your mind are home prices and mortgage rates. You're wondering about future trends and whether it's better to move now or wait.

The best approach is to make an informed decision based on the latest data. Here’s what experts are saying about both prices and rates.

1. What’s Next for Home Prices? A reliable source for home price forecasts is the Home Price Expectations Survey from Fannie Mae, which includes insights from over one hundred economists, real estate experts, and market strategists.

While the appreciation rate varies yearly, the survey indicates prices will increase (not decrease) for at least the next five years, albeit at a more moderate pace.

What does that mean for your move? Buying now means your home will likely appreciate in value, building equity over the years. However, if you wait and prices continue to rise, homes will only become more expensive.

2. When Will Mortgage Rates Come Down? This is a pressing question with no simple answer, as various factors contribute to the current volatile mortgage rate environment. Odeta Kushi, Deputy Chief Economist at First American, explains:

“Each month brings new inflation and labor data that can influence mortgage rates. Ongoing inflation deceleration, a slowing economy, and even geopolitical uncertainty can lower rates. Conversely, data indicating inflation risks may drive rates higher.” The future of rates depends on these factors. Experts are hopeful rates will drop later this year but acknowledge that changing economic indicators will have an impact. As a CNET article notes:

“While mortgage rates might decrease later in the year, housing market predictions frequently adjust in response to economic data, geopolitical events, and more.” If you're ready and able to buy a home now, work with a trusted real estate advisor to explore your options and make an informed decision.

Bottom Line Let’s connect to ensure you have the latest information on home prices and mortgage rate expectations. Together, we’ll review expert insights so you can make an informed decision about your move.