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Source: KCM
Over the past few months, experts have revised their 2024 home price forecasts based on the latest data and market signals, and they’re even more confident prices will rise, not fall.
So, let’s see exactly how experts’ thinking has shifted – and what’s caused the change.
The chart below shows what seven expert organizations think will happen to home prices in 2024. It compares their first 2024 home price forecasts (made at the end of 2023) with their newest projections:
The middle column shows that, at first, these experts thought home prices would only go up a little this year. But if you look at the column on the right, you’ll see they’ve all updated their forecasts and now think prices will go up more than they originally thought. And some of the differences are major.
There are two big factors keeping such strong upward pressure on home prices. The first is how few homes are for sale right now. According to Business Insider:
“Low home inventory is a chronic problem in the US. This has generally kept home prices up . . .”
A lack of housing inventory has been pushing prices up for a long time now – and that’s not expected to change dramatically this year. But what has changed a bit is mortgage rates.
Late last year when most housing market experts were calling for home prices to rise only a little bit in 2024, mortgage rates were up and buyer demand was more moderate.
Now that rates have come down from their peak last October, and with further declines expected over the course of the year, buyer demand has picked up. That increase in demand, along with an ongoing lack of inventory, is what’s caused the experts to feel the upward pressure on prices will be stronger than they expected a couple months ago.
Real estate experts regularly revise their home price forecasts as the housing market shifts. It’s a normal part of their job that ensures their projections are always up-to-date and factor in the latest changes in the housing market.
That means they’ll continue to revise their projections as the housing market changes, just as they’ve always done. How those forecasts change next is anyone’s guess, but pay attention to mortgage rates.
If they trend down as the year goes on, as they’re expected to do, that could lead to more buyer demand and even higher home price forecasts.
Basically, it’s all about supply and demand. With supply still so limited, anything that causes demand to go up will likely cause prices to go up, too.
At first, experts believed home prices would only go up a little this year. But now, they’ve changed their minds and forecast prices will grow even more than they originally thought. Connect with a local real estate agent so you know what to expect with prices in your area.
Source: KCM
There’s a lot of confusion in the market about what’s happening with day-to-day movement in mortgage rates right now, but here’s what you really need to know: compared to the near 8% peak last fall, mortgage rates have trended down overall.
And if you’re looking to buy or sell a home, this is a big deal. While they’re going to continue to bounce around a bit based on various economic drivers (like inflation and reactions to the consumer price index, or CPI), don’t let the short-term volatility distract you. The experts agree the overarching downward trend should continue this year.
While we won’t see the record-low rates homebuyers got during the pandemic, some experts think we should see rates dip below 6% later this year. As Dean Baker, Senior Economist, Center for Economic Research, says:
“They will almost certainly not fall to pandemic lows, although we may soon see rates under 6.0 percent, which would be low by pre-Great Recession standards.”
And Baker isn’t the only one saying this is a possibility. The latest Fannie Mae projections also indicate we may see a rate below 6% by the end of this year (see the green box in the chart below):
The chart shows mortgage rate projections for 2024 from Fannie Mae. It includes the one that came out in December, and compares it to the updated 2024 forecast they released just one month later. And if you look closely, you’ll notice the projections are on the way down.
It’s normal for experts to re-forecast as they watch current market trends and the broader economy, but what this shows is experts are feeling confident rates should continue to decline, if inflation cools.
But remember, no one can say for sure what will happen (and by when) – and short-term volatility is to be expected. So, don’t let small fluctuations scare you. Focus on the bigger picture.
If you’ve found a home you love in today’s market – especially where finding a home that meets your budget and your needs can be a challenge – it’s probably not a good idea to try to time the market and wait until rates drop below 6%.
With rates already lower than they were last fall, you have an opportunity in front of you right now. That’s because even a small quarter point dip in rates gives your purchasing power a boost.
If you wanted to move last year but were holding off hoping rates would fall, now may be the time to act. Connect with a real estate agent to get the ball rolling.
Source: KCM
Buying your first home is a big, exciting step and a major milestone that has the power to improve your life. As a first-time homebuyer, it’s a dream you can make come true, but there are some hurdles you’ll need to overcome in today’s housing market – specifically the limited supply of homes for sale and ongoing affordability challenges.
So, if you’re ready, willing, and able to buy your first home, here are three tips to help you turn your dream into a reality.
Paying the initial costs of homeownership, like your down payment and closing costs, can feel a bit daunting. But there are many assistance programs for first-time homebuyers that can help you get a loan with little or no money upfront. According to Bankrate:
“. . . you might qualify for a first-time homebuyer loan or assistance. First-time buyer loans typically have more flexible requirements, such as a lower down payment and credit score. Many help buyers with closing costs and the down payment through grants and low-interest loans.”
To find out more, talk to your state’s housing authority or check out websites like Down Payment Resource.
Right now, there aren’t enough homes for sale for everyone who wants to buy one. That’s pushing home prices up and making affordability tight for buyers. One way to deal with that issue and find a home right now is to consider condos and townhomes. Realtor.com explains:
“For many newbies, it might just be a matter of making a shift toward something they can better afford—like a condo or townhome. These lower-cost homes have historically been a stepping stone for buyers looking for a less expensive alternative to a single-family home.”
One reason why they may be more affordable is because they’re often smaller. But they still give you the chance to get your foot in the door and achieve your goal of owning a home and building equity. And that equity can help fuel your move into a larger home later on if you decide you need something bigger in the future. Hannah Jones, Senior Economic Analyst at Realtor.com, says:
“Condos can help prospective homebuyers who perhaps have a smaller budget, but who are really determined to get a foothold in the market and start to accumulate some equity. It can be a really great entry point.”
Another way to break into the market is by purchasing a home with friends or loved ones. That way you can split the cost of things like the mortgage and bills, to make it easier to afford a home. According to Money.com:
“Buying a home with another person has some obvious advantages in the mortgage department. With two incomes in the mix, buyers can likely qualify for a larger mortgage — a big help in today’s high-cost market.”
By exploring first-time homebuyer assistance, condos, townhomes, and multi-generational living, it can be easier to find and buy your first home. When you’re ready, connect with a local real estate agent.
Source: KCM
If you’re thinking of selling your house this spring, now is the perfect time to start getting it ready. With the market gearing up for its busiest time of year, it’ll be important to make sure your house shines bright among the competition.
Here are some valuable tips you can use to get your house market-ready.
First impressions matter, and if your house is a mess, that can easily turn off potential buyers. Before listing, take the time to declutter and organize each room. Decluttering is about more than just tidying up – it’s about creating a sense of space and openness that allows potential buyers to envision themselves living in your home. According to Moving.com:
“Decluttering and organizing your space will go a long way in appealing to potential buyers. . . .decluttering will help the buyers see themselves living in your home. Less clutter inside a home also helps a place appear larger and cleaner, which should attract more buyers.”
The kitchen and bathrooms are focal points for many buyers, and often influence their overall opinion of the house. Ensure these spaces dazzle by giving them a thorough deep cleaning. Pay attention to details like scrubbing grout lines, polishing fixtures, and decluttering countertops. A sparkling kitchen and bathroom can leave a lasting positive impression on potential buyers.
Your home’s exterior is the first thing potential buyers see, so it’s important to make a good impression from the moment they arrive. A well-maintained yard not only enhances curb appeal, but also shows buyers the home has been well taken care of.
Take the time to spruce up your yard by mowing the lawn, trimming bushes, and clearing away any debris or dead plants. Remember, the goal is to create a welcoming environment that entices buyers to step inside and imagine themselves living there. U.S. News says:
“A beautifully landscaped front yard can elevate an ordinary house into a charming home and will help homes sell faster and for more money.”
A skilled listing agent is your partner in minimizing stress when selling your home. Lean on your agent for advice on decluttering, staging, and enhancing your home’s appeal to potential buyers. Their insights into market trends and recommendations for reliable contractors and stagers are invaluable. As Realtor.com says:
“A good listing agent will help you price your home . . . recommend a photographer and stager to make it look its best, and put your home on the multiple listing service.”
By decluttering, deep cleaning, and tidying up your house, you can create a welcoming environment that resonates with buyers and increases your chances of a successful sale. Connect with a trusted real estate agent for advice on what you need to do to get your house ready to sell this spring.
Source: KCM
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Based on what you’re hearing in the news about home prices, you may be worried they’re falling. But here’s the thing. The headlines aren’t giving you the full picture.
If you look at the national data for 2023, home prices actually showed positive growth for the year. While this varies by market, and while there were some months with slight declines nationally, those were the exception, not the rule.
The overarching story is that prices went up last year, not down. Let’s dive into the data to set the record straight.
If anything, last year marked a return to more normal home price appreciation. To prove it, here’s what usually happens in residential real estate.
In the housing market, there are predictable ebbs and flows that take place each year. It’s called seasonality. It goes like this. Spring is the peak homebuying season when the market is most active. That activity is usually still strong in the summer, but begins to wane toward the end of the year. Home prices follow along with this seasonality because prices grow the most when there’s high demand.
The graph below uses data from Case-Shiller to show how this pattern played out in home prices from 1973 through 2022 (not adjusted, so you can see the seasonality):
As the data shows, for nearly 50 years, home prices match typical market seasonality. At the beginning of the year, home prices grow more moderately. That’s because the market is less active as fewer people move in January and February. Then, as the market transitions into the peak homebuying season in the spring, activity ramps up. That means home prices do too. Then, as fall and winter approach, activity eases again and prices grow, just at a slower rate.
Now, let’s layer the data that’s come out for 2023 so far (shown in green) on top of that long-term trend (still shown in blue). That way, it’s easy to see how 2023 compares.
As the graph shows, moving through the year in 2023, the level of appreciation fell more in line with the long-term trend for what usually happens in the housing market. You can see that in how close the green bars come to matching the blue bars in the later part of the year.
But the headlines only really focused on the two bars outlined in red. Here’s the context you may not have gotten that can really put those two bars into perspective. The long-term trend shows it’s normal for home prices to moderate in the fall and winter. That’s typical seasonality.
And since the 49-year average is so close to zero during those months (0.10%), that also means it’s not unusual for home prices to drop ever so slightly during those times. But those are just blips on the radar. If you look at the year as a whole, home prices still rose overall.
Headlines are going to call attention to the small month-to-month dips instead of the bigger year-long picture. And that can be a bit misleading because it’s only focused on one part of the whole story.
Instead, remember last year we saw the return of seasonality in the housing market – and that’s a good thing after home prices skyrocketed unsustainably during the ‘unicorn’ years of the pandemic.
And just in case you’re still worried home prices will fall, don’t be. The expectation for this year is that prices will continue to appreciate as buyers re-enter the market due to mortgage rates trending down compared to last year. As buyer demand goes up and more people move at the same time the supply of homes for sale is still low, the upward pressure on prices will continue.
Don’t let home price headlines confuse you. The data shows that, as a whole, home prices rose in 2023. If you have questions about what you’re hearing in the news or about what’s happening with home prices in your local area, connect with a trusted real estate professional.
Source: KCM
Chances are at some point in your life you’ve heard the phrase, home is where the heart is. There’s a reason that’s said so often. Becoming a homeowner is emotional.
So, if you’re trying to decide if you want to keep on renting or if you’re ready to buy a home this year, here’s why it’s so easy to fall in love with homeownership.
Your house should be a space that’s uniquely you. And, if you’re a renter, that can be hard to achieve. When you rent, the paint colors are usually the standard shade of white, you don’t have much control over the upgrades, and you’ve got to be careful how many holes you put in the walls. But when you’re a homeowner, you have a lot more freedom. As the National Association of Realtors (NAR) says:
“The home is yours. You can decorate any way you want and choose the types of upgrades and new amenities that appeal to your lifestyle.”
Whether you want to paint the walls a cheery bright color or go for a dark moody tone, you can match your interior to your vibe. Imagine how it would feel to come home at the end of the day and walk into a space that feels like you.
One of the hardest things about renting is the uncertainty of what happens at the end of your lease. Does your payment go up so much that you have to move? What if your landlord decides to sell the property? It’s like you’re always waiting for the other shoe to drop. Jeff Ostrowski, a business journalist covering real estate and the economy, explains how homeownership can give you more peace of mind in a Money Geek article:
“Homeownership means you are the boss and have the biggest say in your lifestyle and family decisions. Suppose your kids are in public school and you don’t want to risk having them change schools because your landlord doesn’t renew your lease. Owning a home would remove much of the risk of having to move.”
You may also find you feel much more at home in the community once you own a house. That’s because, when you buy a home, you’re staking a claim and saying, I’m a part of this community. You’ll have neighbors, block parties, and more. And that’ll give you the feeling of being a part of something bigger. As the International Housing Association explains:
“. . . homeowning households are more socially involved in community affairs than their renting counterparts. This is due to both the fact that homeowners expect to remain in the community for a longer period of time and that homeowners have an ownership stake in the neighborhood.”
Becoming a homeowner is a journey – and it may have been a long road to get to the point where you’re ready to take the plunge. If you’re seriously considering leaving behind your rental and making this commitment, you should know the emotions that come with this owning a home are powerful. You’ll be able to walk up to your front door every day and have that sense of accomplishment welcome you home.
A home is a place that reflects who you are, a safe space for the ones you love the most, and a reflection of all you’ve accomplished. Connect with a local real estate professional if you’re ready to break up with your rental and buy a home.
Source: KCM
Homeownership is a major part of the American Dream. But, the path to achieving this dream can be quite difficult. While progress has been made to improve fair housing access, households of color still face unique challenges on the road to owning a home. Working with the right real estate experts can make all the difference for diverse buyers.
It’s clear that achieving homeownership is more challenging for certain groups because there’s still a measurable gap between the overall average U.S. homeownership rate and that of non-white groups. Today, Black households continue to have the lowest homeownership rate nationally (see graph below):
Homeownership is an important part of building household wealth that can be passed down to future generations. According to a report by the National Association of Realtors (NAR), almost half of Black homebuyers in 2023 were first-time buyers. That means many didn’t have home equity they could use toward their home purchase.
That financial hurdle alone makes buying a home more challenging, especially at a time when affordability is a major concern for first-time buyers. Jessica Lautz, Deputy Chief Economist at NAR says:
“It’s an incredibly difficult market for all home buyers right now, especially first-time home buyers and especially first-time home buyers of color.”
Because of these challenges, there are several down payment assistance programs specifically aimed at helping minority buyers fulfill their homeownership dreams:
Even if you don’t qualify for these programs, there are many other federal, state, and local options available to look into. And a real estate professional can help you find the ones that best meet your needs.
For minority homebuyers, the challenges that remain can be a point of pain and frustration. That’s why it’s so important for members of diverse groups to have the right team of experts on their sides throughout the homebuying process. These professionals aren’t only experienced advisors who understand the market and give the best advice, they’re also compassionate educators who will advocate for your best interests every step of the way.
Connect with a real estate professional to make sure you have to make sure you have the information and support you need as you walk the path to homeownership.
Source: KCM
Are you feeling a bit unsure about what’s really happening with mortgage rates? That might be because you’ve heard someone say they’re coming down. But then you read somewhere else that they’re up again. And that may leave you scratching your head and wondering what’s true.
The simplest answer is: that what you read or hear will vary based on the time frame they’re looking at. Here’s some information that can help clear up the confusion.
Mortgage rates don’t move in a straight line. There are too many factors at play for that to happen. Instead, rates bounce around because they’re impacted by things like economic conditions, decisions from the Federal Reserve, and so much more. That means they might be up one day and down the next depending on what’s going on in the economy and the world as a whole.
Take a look at the graph below. It uses data from Mortgage News Daily to show the ebbs and flows in the 30-year fixed mortgage rate since last October:
If you look at the graph, you’ll see a lot of peaks and valleys – some bigger than others. And when you use data like this to explain what’s happening, the story can be different based on which two points in the graph you’re comparing.
For example, if you’re only looking at the beginning of this month through now, you may think mortgage rates are on the way back up. But, if you look at the latest data point and compare it to the peak in October, rates have trended down. So, what’s the right way to look at it?
Mortgage rates are always going to bounce around. It’s just how they work. So, you shouldn’t focus too much on the small, daily changes. Instead, to really understand the overall trend, zoom out and look at the big picture.
When you look at the highest point (October) compared to where rates are now, you can see they’ve come down compared to last year. And if you’re looking to buy a home, this is big news. Don’t let the little blips distract you. The experts agree, overall, that the larger downward trend could continue this year.
Connect with a professional if you have any questions about what you’re reading or hearing about the housing market.
Source: KCM
