Since the start of the year, monthly mortgage payments have increased significantly, which has caused an overheated housing market to calm down. Due to this, some potential buyers of homes are being priced out of the market, and others are unsure about the best time to make a purchase. But there is no indication that the increase in borrowing costs will soon stop.
Mortgage rates are increasing as a result of the financial market volatility and economic uncertainty. Senior Economist and Manager of Economic Research at realtor.com, George Ratiu, states the following:
While rates above 7% may have sounded unfathomable even two months ago, given the current rate, we may anticipate rates to surpass that level in the upcoming three months.
So, is now the ideal moment to purchase a house? Today, anyone considering purchasing a property ought to ask themselves two questions:
1. What direction do I think home prices will take?
For an answer to this query, there are two directions to look. The majority opinion among specialists comes first. If you look at the predictions made by experts for home price growth in 2023, it will likely be around 2%. While it's true that some predict a decline in property values during the coming year, the majority predicts an increase.
The Home Price Expectation Poll from Pulsenomics, a survey of a national panel of over one hundred economists, real estate specialists, and investment and market strategists, is the second place to look for information. The most recent report states that the experts questioned anticipate housing prices to rise over the coming years (see graph below):
2. In what direction do I anticipate interest rates to go?
Ratiu anticipates an increase in mortgage rates over the coming months, as was already announced. Another specialist concurs. Chief Economist at First American, Mark Fleming, says:
"Although mortgage rates are anticipated to creep higher over the upcoming months, much of the sharp spike is probably behind us."
This erratic market is being driven by global uncertainty and increased inflation, which is raising borrowing costs for homebuyers.
To sum up
If you're considering purchasing a property, knowing the current market value and mortgage rates can enable you to make an informed choice. Experts anticipate increased costs and rates in the future. Renting is an option, but rents are rising as well. That can imply that owning a home is a better option than renting.