Interest Rates • Real Estate • November 23, 2022

Mortgage Rates Will Come Down, It’s Just a Matter of Time

by Kara Brem

Mortgage Rates Will Come Down, It’s Just a Matter of Time | MyKCM

This past year, rising mortgage rates have slowed the red-hot housing market. Over the past nine months, we’ve seen fewer homes sold than the previous month as home price growth has slowed. All of this is due to the fact that the average 30-year fixed mortgage rate has doubled this year, severely limiting homebuying power for consumers. And, this month, the average rate for financing a home briefly rose over 7% before coming back down into the high 6% range. But we’re starting to see a hint of what mortgage interest rates could look like next year.

Inflation Is the Enemy of Long-Term Interest Rates

As long as inflation is high, we’ll see higher mortgage rates. Over the past couple of weeks, we’ve seen indications that inflation may be cooling, giving us a glimpse into what may happen in the future. The mortgage market is eagerly awaiting positive news on inflation. As Ali Wolf, Chief Economist at Zonda, says:

“The housing market is expected to face continued uncertainty heading into 2023 as consumers, financial markets, and policymakers work through their respective challenges in today’s economy. . . . we are watching for any additional stability in the MBS market, signs of cooling inflation, and/or less aggressive Federal Reserve action to give us confidence that mortgage rates are past their peak.”

What Does This Mean for the Future of Mortgage Rates?

As we get through the inflation battle and start to see that coming down, we should expect mortgage rates to follow. We’ve seen nods of this over the past couple of weeks. As the Federal Reserve works to bring inflation down, mortgage rates will come down as well. Bill McBride from Calculated Risk says:

“My current view is inflation will ease quicker than the Fed currently expects.”

As we look toward next year, we certainly hope he’s right.

Bottom Line

Mortgage rates will come down – it’s just a matter of time. The hope is we continue to see more positive news on inflation, and that’ll bring mortgage rates down. This will give prospective homebuyers more buying power and lead to more homeowners throughout the country.

Real Estate • November 9, 2022

3 Trends That Are Good News for Today’s Homebuyers

by Kara Brem

While higher mortgage rates are creating affordability challenges for homebuyers this year, there is some good news for those people still looking to buy a home.

As the market has cooled this year, some of the intensity buyers faced during the peak frenzy of the pandemic has cooled too.

Here are just a few trends that may benefit you when you go to buy a home today.

1. More Homes To Choose from

During the pandemic, housing supply hit a record low at the same time buyer demand skyrocketed. This combination made it difficult to find a home because there just weren’t enough to meet buyer demand. According to Calculated Risk, the supply of homes for sale increased by 39.5% for the week ending October 28 compared to the same week last year.

Even though it’s still a sellers’ market and supply is still lower than more normal levels, you have more to choose from in your home search. That makes finding your dream home a bit less difficult.

2. Bidding Wars Have Eased

One of the top stories in real estate over the past two years was the intensity and frequency of bidding wars. But today, things are different. With more options, you’ll likely see less competition from other buyers looking for homes. According to the National Association of Realtors (NAR), the average number of offers on recently sold homes has declined. This September, the average was 2.5 offers per sale. In contrast, last September, the average was 3.7 offers per sale.

If you tried to buy a house over the past two years, you probably experienced the bidding war frenzy firsthand and may have been outbid on several homes along the way. Now you have a chance to jump back into the market and enjoy searching for a home with less competition.

3. More Negotiation Power

And when you have less competition, you also have more negotiating power as a buyer. Over the last two years, more buyers were willing to skip important steps in the homebuying process, like the appraisal or inspection, to try to win a bidding war. But the latest data from the National Association of Realtors (NAR) shows the percentage of buyers waiving those contingencies is going down.

As a buyer, this is good news. The appraisal and the inspection give you important information about the value and condition of the home you’re buying. And if something turns up in the inspection, you have more power today to renegotiate with the seller.

A survey from realtor.com confirms more sellers are accepting offers that include contingencies today. According to that report, 95% of sellers said buyers requested a home inspection, and 67% negotiated with buyers on repairs as a result of the inspection findings.

Bottom Line

While buyers still face challenges today, they’re not necessarily the same ones you may have been up against just a year or so ago. If you were outbid or had trouble finding a home in the past, now may be the moment you’ve been waiting for. Let’s connect to start the homebuying process today.

Real Estate • October 25, 2022

Mortgage Rate Forecast for October 2022 by Forbes

by Kara Brem

Rates for home loans are caught in a tug-of-war between rising inflation and the Federal Reserve’s actions to restrain inflation which has indirectly pushed rates higher.

The Federal Reserve began hiking its benchmark interest rate in March and then in June, it raised the rate by 75 basis points—the largest increase since 1994—only to repeat that step again in July and September.

“The Fed has reiterated its commitment to keeping the monetary tightening course, warning that consumers and businesses can expect more ‘pain’ ahead,” says George Ratiu, Realtor.com’s director of economic research. This means that rates will likely continue to undergo upward pressure in the upcoming months—or at least until inflation is moderated.

“While rates in the 7% range were [nearly unthinkable in August], with the 10-year Treasury touching 4% this week, we can expect rates to move in the [6.5% to 8% range] through the remainder of the year,” Ratiu says.

But not everyone thinks market conditions will get so extreme in the last months of 2022, as seen in the variety within the following commentary from housing experts:

Mortgage Bankers Association (MBA): We forecast the “average at the end of [the fourth quarter to be] 5.5%. [We’re] still anticipating a lot of volatility.”
Keller Williams Chief Economist Ruben Gonzalez: “The Federal Reserve will continue to ratchet up the federal funds rate to slow inflation, and if the Reserve’s approach becomes more aggressive, we will see mortgage rates increase even further. Rising mortgage rates have continued to slow housing market demand, resulting in slowing sales and slower home price appreciation.”
National Association of Realtors (NAR) Chief Economist Lawrence Yun: “The ongoing stubbornly high inflation has forced the Federal Reserve to take significantly more aggressive measures. As a result, the benchmark 10-year Treasury yield has broken out to 4%. In addition, the holdings of mortgage-backed securities at the Fed are getting trimmed. Mortgage rates could be knocking at 7%.”
Fannie Mae: Forecasts a 5.7% rate in the fourth quarter.

Is There Still Time To Refinance?

Americans watch mortgage rates closely, and any time rates pull back even the slightest amount, more people apply for mortgages. With rates still substantially higher than a year ago, however, applications remain stuck near the lowest level in more than two decades, according to MBA data.

While refinancing options can lead to a lower monthly payment, not all of the options yield less interest over the life of the loan. For example, refinancing from a 5% mortgage with 26 years left on it to a 4% rate, but for 30 years, will cause you to pay more than $13,000 in additional interest.

Before you start shopping around for a lender, you can find out how much you could save by using a mortgage refinancing calculator.

You’ll also want to consider how long you plan on staying in your home as the closing costs can eat up your savings if you sell shortly after refinancing. The closing costs to refinance run between 2% to 5% of the loan amount, depending on the lender. So you should plan on keeping your home long enough to cover those costs and realize the savings from refinancing at a lower rate.

Keep in mind that the rate you qualify for also depends on other factors such as your credit score, debt-to-income (DTI) ratio, loan-to-value (LTV) ratio and proof of steady income.

Current Mortgage Rate Trends

The average mortgage rate for a 30-year fixed is 7.31%, more than double its 3.22% level at the start of the year.

The average cost of a 15-year, fixed-rate mortgage has also surged to 6.49%, compared to 2.43% in early January.

In the current environment, adjustable-rate mortgages may be more affordable than those with fixed rates. The average 5/1 ARM was 5.45% at the end of September.

Current Mortgage Interest Rates for October 2022

Loan term	Interest rate	APR	Monthly P&I Per $100,000
30-year fixed	7.26%	7.27%	$683
15-year fixed	6.49%	6.53%	$871
30-year jumbo	7.28%	7.29%	$684
5/1 ARM	5.46%	7.04%	$565
Source: Bankrate.com

Andrea Riquier

Forbes Advisor Staff

Real Estate • September 16, 2022

Buyers Are Regaining Some of Their Negotiation Power in Today’s Housing Market

by Kara Brem

If you’re thinking about buying a home today, there’s welcome news. Even though it’s still a sellers’ market, it’s a more moderate sellers’ market than last year. And the days of feeling like you may need to waive contingencies or pay drastically over asking price to get your offer considered may be coming to a close.

Today, you should have less competition and more negotiating power as a buyer. That’s because the intensity of buyer demand and bidding wars is easing this year. So, if bidding wars were the biggest factor that had you sitting on the sidelines, here are two trends that may be just what you need to re-enter the market.

1. The Return of Contingencies

Over the last two years, more buyers were willing to skip important steps in the homebuying process, like the appraisal or inspection, to try to win a bidding war. But now, fewer people are waiving the inspection and appraisal.

The latest data from the National Association of Realtors (NAR) shows the percentage of buyers waiving their home inspection and appraisal is declining. And a recent survey from realtor.com confirms more sellers are accepting offers that include these conditions today. According to their August study:

95% of sellers reported buyers requested a home inspection
67% of sellers negotiated with buyers on repairs as a result of the inspection findings

This goes to show buyers are more able to include these conditions in their offers today and negotiate as needed based on the outcome of the inspection.

2. Sellers Are More Willing To Help with Closing Costs

Generally, closing costs range between 2% and 5% of the purchase price for the home. Before the pandemic, it was a common negotiation tactic for sellers to cover some of the buyer’s closing costs to sweeten the deal. This didn’t happen as much during the peak buyer frenzy over the past two years.

Today, as the market shifts and demand slows, data from realtor.com suggests this is making a comeback. A recent article shows 32% of sellers paid some or all of their buyer’s closing costs. This may be a negotiation tool you’ll see as you go to purchase a home. Just keep in mind, limits on closing cost credits are set by your lender and can vary by state and loan type. Work closely with your loan advisor to understand how much a seller can contribute to closing costs in your area.

Bottom Line

Regardless of the extremely competitive housing market of the past several years, today’s data suggests negotiations are starting to come back on the table. This is good news if you’re planning to enter the housing market. To find out how the market is shifting in our area, let’s connect.

Real Estate • August 25, 2022

Why Today’s Housing Inventory Proves the Market Isn’t Headed for a Crash

by Kara Brem

Whether or not you owned a home in 2008, you likely remember the housing crash that took place back then. And news about an economic slowdown happening today may bring all those concerns back to the surface. While those feelings are understandable, data can help reassure you the situation today is nothing like it was in 2008.

One of the key reasons why the market won’t crash this time is the current undersupply of inventory. Housing supply comes from three key places:

Current homeowners putting their homes up for sale
Newly built homes coming onto the market
Distressed properties (short sales or foreclosures)

For the market to crash, you’d have to make a case for an oversupply of inventory headed to the market, and the numbers just don’t support that. So, here’s a deeper look at where inventory is coming from today to help prove why the housing market isn’t headed for a crash.

Current Homeowners Putting Their Homes Up for Sale

Even though housing supply is increasing this year, there’s still a limited number of existing homes available. The graph below helps illustrate this point. Based on the latest weekly data, inventory is up 27.8% compared to the same week last year (shown in blue). But compared to the same week in 2019 (shown in the larger red bar), it’s still down by 42.6%.

So, what does this mean? Inventory is still historically low. There simply aren’t enough homes on the market to cause prices to crash. There would need to be a flood of people getting ready to sell their houses in order to tip the scales toward a buyers’ market. And that level of activity simply isn’t there.

Newly Built Homes Coming onto the Market

There’s also a lot of talk about what’s happening with newly built homes today, and that may make you wonder if we’re overbuilding. But home builders are actually slowing down their production right now. Ali Wolf, Chief Economist at Zonda, notes:

“It has become a very competitive market for builders where they are trying to offload any standing inventory.”

To avoid repeating the overbuilding that happened leading up to the housing crisis, builders are reacting to higher mortgage rates and softening buyer demand by slowing down their work. It’s a sign they’re being intentional about not overbuilding homes like they did during the bubble.

And according to the latest data from the U.S. Census, at today’s current pace, we’re headed to build a seasonally adjusted annual rate of about 1.4 million homes this year. While this will add more inventory to the market, it’s not on pace to create an oversupply because builders today are more cautious than the last time when they built more homes than the market could absorb.

Distressed Properties (Short Sales or Foreclosures)

The last place inventory can come from is distressed properties, including short sales and foreclosures. Back in the housing crisis, there was a flood of foreclosures due to lending standards that allowed many people to secure a home loan they couldn’t truly afford. Today, lending standards are much tighter, resulting in more qualified buyers and far fewer foreclosures. The graph below uses data from ATTOM Data Solutions on properties with foreclosure filings to help paint the picture of how things have changed since the crash:

This graph shows how in the time around the housing crash there were over one million foreclosure filings per year. As lending standards tightened since then, the activity started to decline. And in 2020 and 2021, the forbearance program was a further aid to help prevent a repeat of the wave of foreclosures we saw back around 2008.

That program was a game changer, giving homeowners options for things like loan deferrals and modifications they didn’t have before. And data on the success of that program shows four out of every five homeowners coming out of forbearance are either paid in full or have worked out a repayment plan to avoid foreclosure. These are a few of the biggest reasons there won’t be a wave of foreclosures coming to the market.

Bottom Line

Although housing supply is growing this year, the market certainly isn’t anywhere near the inventory levels that would cause prices to drop significantly. That’s why inventory tells us the housing market won’t crash.

Real Estate • May 31, 2022

The shift has begun — but rate hikes won’t be housing’s Achilles’ heel

by Kara Brem

The housing market is on the cusp of an “inflection point” right now.

That at least, is the takeaway from multiple recent reports as well as conversations Inman had with industry economists. And it’s an inflection point that will impact prices, supply, demand and the lives of agents and consumers alike. It’s a big deal.

But there are two parts to this shift. First, the freewheeling bonanza of the past two years that was fueled, in part, by cheap money is ebbing, and the scales may tip at least slightly more toward buyers.

But second, and significantly, a shift is not a collapse. Though rising mortgage rates are cooling the market, the high rates of the 1980s and 1990s aren’t on their way back, nor is a collapse imminent thanks to the more modest hikes that are taking place. Rates, in other words, are the big driver of this story, but in the end shouldn’t become an Achilles’ heel for real estate going forward.

The shift is happening

The evidence of a shift has been mounting for months, but suddenly feels like it’s everywhere now. Just days ago, for instance, Fannie Mae reported that both homebuilding and home sales are headed for a slowdown.

Tucker is also seeing this same rise in inventory, and he described the trend as “a really important piece of the puzzle.”

“That is a good leading indicator that buyers will have more options this summer,” he added.

Before the pandemic, buyers having more options in the summer would have sounded unremarkable. But the severe inventory shortage of the last two years and the resulting double-digit price growth make any upticks in supply and downticks in appreciation significant.

“These are signs that the market is shifting more into buyers’ territory,” Fairweather said, though she added that the market is a long way from the conventional idea of a “buyer’s market.”

The big driver of these shifts is rising mortgage rates. The economists who spoke to Inman noted that rising rates have made housing more expensive and knocked some buyers out of the game, meaning demand is leveling off somewhat.

compared to recent weeks, but not enough of a drop to juice demand back up to where it was months ago. Joel Kan, a forecaster for the Mortgage Bankers Association, described the current rates in a statement as “well above what borrowers were used to over the past two years.”

Whether this is good or bad news depends on where you stand. Tucker noted, for example, that fast-rising prices over the last two years left some people on the sidelines. And many of them might welcome a slower, more buyer-oriented market.

“I think a lot of those folks, a lot of millennials, maybe a lot of people in Gen Z are hoping for a correction, hoping to see prices come back down,” Tucker said.

Rising rates aren’t the apocalypse

Despite the hopes of sidelined would-be homeowners, neither Tucker nor anyone else who spoke to Inman for this story envisions any major price drops in the near future. In other words, while the rate of price appreciation is widely expected to slow, that doesn’t mean it’ll go in reverse.

“We’re still expecting a year from now that prices will be higher than they are now,” Tucker said.

Jessica Lautz

Jessica Lautz, president of demographics and behavioral insights at the National Association of Realtors (NAR), agreed and noted that a bubble is unlikely “because of the hot buyer demand that still exists.”

“There are a lot of buyers who have been waiting for less competition in the market place,” she told Inman.

Like other experts who spoke with Inman, Lautz pointed to rising interest rates as a factor in cooling the once-red hot housing market. But she also said the trend toward rising rates should slow.

“Our current forecast says this is about where rates will go,” she said. “We don’t see them rising substantially more.”

While current mortgage rates may be a shock to homebuyers just entering the market for the first time, they’re also low compared to historical norms. The early 1970s began with average rates in the low 7 percent range, according to the St. Louis Fed, and they steadily rose to more than 18 percent in the early 1980s. Rates didn’t fall to below 6 percent until the early 2002s.

Credit:St. Louis Fed

Looking at the St. Louis Fed’s graph, the current spike in rates is notable, but no where near what was happening in the 1980s.

Inman asked the experts who spoke out for this story if they envisioned rates returning to the highs of the 1980s and 1990s. They didn’t.

Fairweather instead said that the trend toward low rates is tied to a variety of economic conditions, for example the U.S. becoming a more desirable place for foreign investment. No one has a crystal ball, but Fairweather said the conditions that led to low rates still exist and she expects spikes to be temporary.

“Once these inflation woes are resolved,” she explained, “rates will start going in their long term trajectory, which is down.”

Fairweather also doesn’t see a bubble on the horizon, saying that the current shift is likely to be a more minor moment of cyclicality akin to 2018 rather than a monumental change like what happened in 2008.

“We don’t expect that there’s a national home price bubble,” she said.

The dangers going forward

Still, there are some things that trouble the pros. Inman asked the experts if there was ever likely to be a time that was as good for buying a house as the last two years. Though the last two years saw rapidly rising prices, low mortgage rates also made borrowing incredibly cheap. If prices keep rising and mortgage rates are up, does that mean the people who didn’t get into the market missed a once-in-a-life-time opportunity?

It’s not exactly so simple.

Fairweather, for instance, strongly advised against trying to time the market, saying the best time to buy a house is when a person needs a house.

In Tucker’s case, he described the last two years as a “strikingly good bargain, mainly on the basis on interest rates,” and noted that a major concern of his is that “so many first time homebuyers are priced out of the market.”

Aside from complicating the typical path to homeownership and wealth building for many Americans, this situation could also ripple out and cause problems for the supply of new homes — which in the end may mean homes will remain expensive.

“My fear is that a lot of builders will pull back and stop building as fast as they have been,” Tucker said. “We need builders to continue firing on all cylinders. If they’re not building and investing, that will guarantee that homes remain unaffordable for large swaths of people.”

Real Estate • May 3, 2022

How Homeownership Can Help Shield You from Inflation

by Kara Brem

If you’re following along with the news today, you’ve likely heard about rising inflation. You’re also likely feeling the impact in your day-to-day life as prices go up for gas, groceries, and more. These rising consumer costs can put a pinch on your wallet and make you re-evaluate any big purchases you have planned to ensure they’re still worthwhile.

If you’ve been thinking about purchasing a home this year, you’re probably wondering if you should continue down that path or if it makes more sense to wait. While the answer depends on your situation, here’s how homeownership can help you combat the rising costs that come with inflation.

Homeownership Offers Stability and Security

Investopedia explains that during a period of high inflation, prices rise across the board. That’s true for things like food, entertainment, and other goods and services, even housing. Both rental prices and home prices are on the rise. So, as a buyer, how can you protect yourself from increasing costs? The answer lies in homeownership.

Buying a home allows you to stabilize what’s typically your biggest monthly expense: your housing cost. If you get a fixed-rate mortgage on your home, you lock in your monthly payment for the duration of your loan, often 15 to 30 years. James Royal, Senior Wealth Management Reporter at Bankrate, says:

“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.”

So even if other prices rise, your housing payment will be a reliable amount that can help keep your budget in check. If you rent, you don’t have that same benefit, and you won’t be protected from rising housing costs.

Use Home Price Appreciation to Your Benefit

While it’s true rising mortgage rates and home prices mean buying a house today costs more than it did a year ago, you still have an opportunity to set yourself up for a long-term win. Buying now lets you lock in at today’s rates and prices before both climb higher.

In inflationary times, it’s especially important to invest your money in an asset that traditionally holds or grows in value. The graph below shows how home price appreciation outperformed inflation in most decades going all the way back to the seventies – making homeownership a historically strong hedge against inflation (see graph below):

So, what does that mean for you? Today, experts say home prices will only go up from here thanks to the ongoing imbalance in supply and demand. Once you buy a house, any home price appreciation that does occur will be good for your equity and your net worth. And since homes are typically assets that grow in value (even in inflationary times), you have peace of mind that history shows your investment is a strong one.

Bottom Line

If you’re ready to buy a home, it may make sense to move forward with your plans despite rising inflation. If you want expert advice on your specific situation and how to time your purchase, let’s connect.

Real Estate • April 7, 2022

The Future of Home Price Appreciation and What It Means for You

by Kara Brem

Many consumers are wondering what will happen with home values over the next few years. Some are concerned that the recent run-up in home prices will lead to a situation similar to the housing crash 15 years ago.

However, experts say the market is totally different today. For example, Odeta Kushi, Deputy Chief Economist at First American, tweeted just last week on this issue:

“. . . We do need price appreciation to slow today (it’s not sustainable over the long run) but high price growth today is supported by fundamentals- short supply, lower rates & demographic demand. And we are in a much different & safer space: better credit quality, low DTI [Debt-To-Income] & tons of equity. Hence, a crash in prices is very unlikely.”

Price appreciation will slow from the double-digit levels the market has seen over the last two years. However, experts believe home values will not depreciate (where a home would lose value).

To this point, Pulsenomics just released the latest Home Price Expectation Survey – a survey of a national panel of over 100 economists, real estate experts, and investment and market strategists. It forecasts home prices will continue appreciating over the next five years. Below are the expected year-over-year rates of home price appreciation based on the average of all 100+ projections:

2022: 9%
2023: 4.74%
2024: 3.67%
2025: 3.41%
2026: 3.57%

Those responding to the survey believe home price appreciation will still be relatively high this year (though half of what it was last year), and then return to more normal levels over the next four years.

What Does This Mean for You as a Buyer?

With a limited supply of homes available for sale and both prices and mortgage rates increasing, it can be a challenging market to navigate as a buyer. But buying a home sooner rather than later does have its benefits. If you wait to buy, you’ll pay more in the future. However, if you buy now, you’ll actually be in the position to make future price increases work for you. Once you buy, those rising home prices will help you build your home’s value, and by extension, your own household wealth through home equity.

As an example, let’s assume you purchased a $360,000 home in January of this year (the median price according to the National Association of Realtors rounded up to the nearest $10K). If you factor in the forecast for appreciation from the Home Price Expectation Survey, you could accumulate over $96,000 in household wealth over the next five years (see graph below):

Bottom Line

If you’re trying to decide whether to buy now or wait, the key is knowing what’s expected to happen with home prices. Experts say prices will continue to climb in the years ahead, just at a slower pace. So, if you’re ready to buy, doing so now may be your best bet for your wallet. It’ll also give you the chance to use the future home price appreciation to build your own net worth through rising equity. If you want to get started, let’s connect today.

Real Estate • January 18, 2022

Sellers: Don’t Wait Until Spring To Make Your Move

by Kara Brem

As you plan out your goals for the year, moving up to your dream home may top the list. But, how do you know when to make your move? You want to time it just right so you can get the most out of the sale of your current house. You also want to know you’re making a good investment when you buy your new home. What you may not realize is, that opportunity to get the best of both worlds is already here.

You don’t want to wait until spring to spring into action. The current market conditions make this winter an ideal time to move. Here’s why.

1. The Number of Homes on the Market Is Still Low

Today’s limited supply of houses for sale is putting sellers in the driver’s seat. There are far more buyers in the market than there are homes available, and that means buyers are eagerly waiting for your house. Listing your house now makes it the center of attention. As a seller, that means when it’s priced correctly, you can expect it to sell quickly and get multiple strong offers this season. Just remember, experts project more inventory will come to market as we move through the winter months. The realtor.com 2022 forecast says this:

“After years of declining, the inventory of homes for sale is finally expected to rebound from all-time lows.”

Selling now may help you maximize the return on your investment before your house has to face more competition from other sellers.

2. Your Equity Is Growing in Record Amounts

Current homeowners are sitting on record amounts of equity thanks to today’s home price appreciation. According to the latest report from CoreLogic, the average homeowner gained $56,700 in equity over the past 12 months.

That much equity can open doors for you to make a move. If you’ve been holding off on selling because you’re worried about how rising prices will impact your own home search, rest assured your equity can help fuel your next move. It may be just what you need to cover a large portion – if not all – of the down payment on your next purchase.

3. While Rising, Mortgage Rates Are Still Historically Low

In January of last year, mortgage rates hit the lowest point ever recorded. Today, rates are starting to rise, but that doesn’t mean you’ve missed out on locking in a low rate. Current mortgage rates are still far below what they’ve been in recent decades:

In the 2000s, the average mortgage rate was 6.27%
In the 1990s, the average rate was 8.12%

Even with mortgage rates rising above 3%, they’re still worth taking advantage of. You just want to do so sooner rather than later. Experts are projecting rates will continue to rise throughout this year, and when they do, it’ll cost you more to purchase your next home.

4. Home Prices Are Going To Keep Rising with Time

According to industry leaders, home prices will also continue appreciating this year. While experts are forecasting more moderate home price growth than last year, it’s important to note prices will still be moving in an upward direction throughout 2022.

What does that mean for you? If you’re selling so you can move into a bigger home or downsize to the home of your dreams, you want to consider moving now before rates and prices rise further. If you’re ready, you have an opportunity to get ahead of the curve by purchasing your next home before rates and prices climb higher.

Bottom Line

If you’re considering selling to move up or downsize, this may be your moment, especially with today’s low mortgage rates and limited inventory. Let’s connect today to get set up for homebuying success this year.

Real Estate • December 29, 2021

Expert Insights on the 2022 Housing Market

by Kara Brem

As we move into 2022, both buyers and sellers are wondering, what’s next? Will there be more homes available to buy? Will prices keep climbing? How high will mortgage rates go? For the answer to those questions and more, we turn to the experts. Here’s a look at what they say we can expect in 2022.

Odeta Kushi, Deputy Chief Economist, First American:

“Consensus forecasts put rates at about 3.7% by the end of next year. So, that’s still historically low, but certainly higher than they are today.”

Danielle Hale, Chief Economist, realtor.com:

“Affordability will increasingly be a challenge as interest rates and prices rise, but remote work may expand search areas and enable younger buyers to find their first homes sooner than they might have otherwise. And with more than 45 million millennials within the prime first-time buying ages of 26-35 heading into 2022, we expect the market to remain competitive.”

Lawrence Yun, Chief Economist, National Association of Realtors (NAR):

“With more housing inventory to hit the market, the intense multiple offers will start to ease. Home prices will continue to rise but at a slower pace.”

George Ratiu, Manager of Economic Research, realtor.com:

“We also expect a growing number of homeowners to bring properties to market, taking some pressure off high prices and offering buyers more options.”

Mark Fleming, Chief Economist, First American:

“Strong demographic demand will continue to act as the wind in the housing market’s sails.”

What Does This Mean for Buyers?

Hope is on the horizon for 2022. You should see your options grow as more homes are listed and some of the peak intensity of buyer competition starts to ease. Just remember, rising rates and prices are a great motivator for you to find the home of your dreams sooner rather than later so you can buy while today’s affordability is still in your favor.

What Does This Mean for Sellers?

Make no mistake – this sellers’ market will remain in 2022 as home prices are projected to continue climbing, just at a more moderate pace. Selling your house while buyer demand is so high will truly put you in the driver’s seat. But don’t wait too long. With more listings projected to become available, your ideal window of opportunity to stand out from the crowd won’t last forever. Work with an agent who knows your local market and current inventory conditions to ensure you have the support you need to make an educated and informed decision about selling in the coming year.

Bottom Line

If you’re thinking of buying or selling, 2022 may be your year. Let’s connect to discuss your goals and the unique opportunities you have in today’s housing market.