Expert Housing Market Forecasts for the Second Half of the Year | Christophe Choo at Coldwell Banker Global Luxury is Your Local Real Estate Expert
Expert Housing Market Forecasts for the Second Half of the Year | Christophe Choo at Coldwell Banker Global Luxury is Your Local Real Estate Expert
TheĀ housing marketĀ is at a turning point, and if youāre thinking of buying or selling a home, that may leave you wondering:Ā is it still a good time to buy a home? Should I make a move this year?Ā To help answer those questions, letās turn to the experts for projections on what the second half of the year holds for residential real estate.
Where Mortgage Rates Will Go Depends on Inflation
While one of the big questions on all buyersā minds is where will mortgage rates go in the months ahead, no one has a crystal ball to know exactly whatāll happen in the future. WhatĀ housing marketĀ experts know for sure is that the record-low mortgage rates during the pandemic were an outlier, not the norm.
This year, rates have climbedĀ over 2%Ā due to the Federal Reserveās response toĀ rising inflation. If inflation continues to rise, itās likely that mortgage rates will respond. Greg McBride, Chief Financial Analyst atĀ Bankrate,Ā explainsĀ it well:
āUntil inflation peaks, mortgage rates wonāt either.Ā Without improvement on the inflation front, we donāt know where the interest rate ceiling will be.ā
Whether youāre buying yourĀ first homeĀ or selling your current house toĀ make a move, todayās mortgage rate is an important factor to consider. When rates rise, they impact affordability and your purchasing power.Ā Thatās why itās crucial to work with a team of professionals, so you have expert advice to help you make an informed decision about your best move.
The Supply of Homes for Sale Projected To Continue Increasing
This year, particularly this spring, theĀ number of homes for saleĀ has grown. Thatās partly due to more homeowners listing their houses, but also because higher mortgage rates have helped ease the intensity of buyer demand. Moderating buyer demand slows down the pace of home sales, which in turn helpsĀ inventory rise.
Experts say that growth will continue. Recently,Ā realtor.comĀ updated theirĀ 2022 inventory forecast. In the latest release, they increased their projections for inventory gains dramatically, going from a 0.3% increase at the beginning of the year to a 15.0% jump by the end of 2022 (see graph below):
More homes to choose from is great news if youāre craving more options for your home search ā just know that there isnāt a sudden surplus of inventory on the horizon. Housing supply is still low, so youāll need to partner with an agent to stay on top of whatās available in your market and move fast when you find the one.Ā Itās not going to be easy to find a home, but it certainly wonāt be as difficult as it has been over the past two years.
Home Price Forecasts Call for Ongoing Appreciation
Due to the imbalance between the number of homes for sale and the number of buyers looking to make a purchase, the pandemic led to record-breaking increases in home prices. According toĀ CoreLogic, homes appreciated by 15% in 2021, and theyāve continued to rise this year.
Even though housing supply is increasing today, there are still more buyers than there are homes for sale, and thatās maintaining the upward pressure onĀ home prices. Thatās why experts are not calling for prices to decline, rather theyāre forecasting theyāll continue to climb, just at a more moderate pace this year. On average, homes are projected to appreciate by about 8.5% in 2022 (see graph below):
Selma Hepp, Deputy Chief Economist atĀ CoreLogic,Ā explainsĀ why the housing market will see deceleration, but not depreciation, in prices:
āThe current home price growth rate is unsustainable, and higher mortgage rates coupled with more inventory will lead toĀ slower home price growth but unlikely declines in home prices.ā
For current homeowners looking to sell, know your homeās value isnāt projected to fall, but waiting to make your purchase does mean your next home could cost more as home prices continue to appreciate. Thatās why, if youāre thinking about buying your first home or youāre ready to make a move, it may make sense to do so now before prices climb higher. But rest assured, once you buy a home, that price appreciation will help grow the value of yourĀ investment.
Bottom Line
Whether youāre a homebuyer or seller, you need to know whatās happening in the housing market, so you can make the most informed decision possible. Letās connect to discuss your goals and what lies ahead, so you can determine the best plan for your move.
Call Christophe Choo at (310) 777-6342 to tour your future home "HERE"Ā
or click "HERE"to estimate your home value