What's Ahead for Home Prices?
As the housing market cools in response to the dramatic rise in mortgage rates, home price appreciation is cooling as well. And if you're following along with headlines in the media, you're probably seeing a wide range of opinions calling for everything from falling home prices to ongoing appreciation. But what's true? What's most liekly to happen moving forward? While opinions differ, the most likely outcome is we'll fall somewhere in the middle of slight appreciation and slight depreciaiton. Here's a look at the latest expert projections os you have the best information possible today. What the Experts Are Saying About Home Prices Next Year The graph below shows the most up-to-date forecasts from five experts in the housing industry. These are the experts that have most recently updated their projections based on current market trends: As the graph shows, the three dark blue bars represent experts calling for ongoing home price appreciation, just at a more moderate rate than recent years. The orange bars on the graph are experts calling for home price depreciation. While there isn't a clear consensus, if you take the average (shown in teal) of all five of these forecasts, the most likely outcome is, nationally, home price appreciation will be fairly flat next year. What Does This Mean? Basically, experts are divided on what's ahead for 2023. Home prices will likely depreciate slightly in some markets and will continue to gain ground in others. It all depends on the conditions in your local market, like how overheated that market was in recent years, current inventory levels, buyer demand, and more. The good news is home prices are expected to return to more normal levels of appreciation rather quickly. The latest forecast from Wells Fargo shows that, while they feel prices will fall in 2023, they think prices will recover and net positive in 2024. That forecast calls for 3.1% appreciation in 2024, which is a number much more in line with the long-term average of 4% annual appreciation. And the Home Price Expectation Survey (HPES) from Pulsenomics, a poll of over one hundred industry experts, also calls for ongoing appreciation of roughly 2.6 to 4% from 2024-2026. This goes to show, even if prices decline slightly next year, it's not expected to be a lasting trend. As Jason Lewris, Co-Founder and Chief Data Officer for Parcl, says: “In the absence of trustworthy, up-to-date information, real estate decisions are increasingly being driven by fear, uncertainty, and doubt.” Don’t let fear or uncertainty change your plans. If you’re unsure about where prices are headed or how to make sense of what’s going on in today’s housing market, reach out to a local real estate professional for the guidance you need each step of the way. Bottom Line The housing market if shifting, and it's a confusing place right now. Let's connect so you have a trusted real estate team to help you make confident and informed decisions about what's happening in our local market.
Should You Still Buy a Home with the Latest News About Inflation?
While the Federal Reserve is working hard to bring down inflation, the latest data shows the inflation rate is still high, remaining around 8%. This news impacted the stock market and added fuel to the fire for conversations about a recession. You’re likely feeling the impact in your day-to-day life as you watch the cost of goods and services climb. The pinch it’s creating on your wallet and the looming economic uncertainty may leave you wondering: “should I still buy a home right now?” If that question is top of mind for you, here’s what you need to know. Homeownership Is Historically a Great Hedge Against Inflation In an inflationary economy, prices rise across the board. Historically, homeownership is a great hedge against those rising costs because you can lock in what’s likely your largest monthly payment (your mortgage) for the duration of your loan. That helps stabilize some of your monthly expenses. James Royal, Senior Wealth Management Reporter at Bankrate, explains: “A fixed-rate mortgage allows you to maintain the biggest portion of housing expenses at the same payment. Sure, property taxes will rise and other expenses may creep up, but your monthly housing payment remains the same.” And with rents being as high as they are, the ability to stabilize your monthly payments and protect yourself from future rent hikes may be even more important. Lawrence Yun, Chief Economist at the National Association of Realtors (NAR), explaine what happened to rents in the latest inflation report: “Inflation refuses to budge. In September, consumer prices rose by 8.2%. Rents rose by 7.2%, the highest pace in 40 years.” When you rent, your monthly payment is determined by your lease, which typically renews on an annual basis. With inflation high, your landlord may be more likely to increase your payments to offset the impact of inflation. That may be part of the reason why a survey from realtor.com shows 72% of landlords said they plan to raise the rent on one or more of their properties in the next year. Becoming a homeowner, if you’re ready and able to do so, can provide lasting stability and a reliable shelter in times of economic uncertainty. Bottom Line The best hedge against inflation is a fixed housing cost. If you’re ready to learn more and start your journey to homeownership, let’s connect.
Leveraging Your Home's Equity in Northern Virginia
Having met with hundreds of homeowners over the years, we have learned one important fact: Most people do not have an accurate idea of what their home is worth or where the market is headed. The good news is that we have a fantastic complimentary resource...our Annual Equity Review program for past clients and friends! Similar to an annual review with your financial advisor, we'll review your home's equity position and the Northern VA market so you can better understand how to leverage your equity and how this equity has impacted your overall NET WORTH. The Equity Review consists of: A researched analysis of the current closed sales in your immediate neighborhood and area. Our views on the conditions driving the real estate market Your home's current value range A projection of where we believe the market is headed over the next 12 months. Send us a message if you're interested in scheduling your Annual Equity Review with one of our agents! (P.S. this service is FREE!)
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