WILL REAL ESTATE PRICES EVER INCREASE OR DECREASE
So, you’re thinking pretty hard about buying or selling a home and want to know how the housing market will look. Well, housing market predictions are about as reliable as weather forecasts — no one can predict what’s going to happen with 100% accuracy.
Low inventory, fervid competition, and massive price gains have battered buyers since 2020, but now rapidly rising mortgage rates are making it even harder to purchase an affordable home.
For many buyers, higher mortgage rates mean they can no longer afford homes in specific price ranges. The problem is that even modest single-family homes cost as much as lavish pads did a few years ago, so buyers are stuck either waiting for more inventory to come online or moving to a more affordable area. And there are many more who are hoping prices will drop — but that might not happen anytime soon.
Okay, first things first: 2022 is not 2021. The crazy time of houses selling in a few hours after getting 20 offers for thousands of dollars over the asking price is finished. But the market is still strong. It’s just not crazy anymore.
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As we head into the typically active homebuying summer season, experts chime in on what we can expect from prices and rates.
Will Home prices ever rise.?
Call it ‘hot home-price summer,’ as inflation, high housing demand and low supply continue to send costs skyward. Economists at Realtor.com recently revised their forecast for median sales price appreciation on existing homes to 6.6% in 2022, up from their previous prediction of just 2.9%.
Rising rent prices and now higher mortgage rates — which soared from an average of just 3.2% at the start of the year to 5.81% by mid-June — have driven up the cost of housing, pricing many people out of the market. This has caused home sales to begin falling as more people can no longer afford homes at the current heated prices.
Home prices might expand, but the options will, too, according to some economists.
So if you have any intention to buy a house, you can if it's your personal choice.
Buying a house — in any market — is a highly personal decision. Because homes represent the largest single purchase most people will make in their lifetime, it’s crucial to be in a solid financial position before diving in.
Conclusion
Trying to time the market or predict what might happen next year is not the best homebuying strategy. Instead, it’s better to buy based on your budget and needs. If you find a home you love in an area you love and it also fits your budget, then chances are it might be right for you. However, if you make too many sacrifices just to get a house, you may end up with buyer’s remorse and an expensive albatross you have to offload.
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