Two Questions To Ask Yourself if You’re Considering Buying a Home

<article class="post-734006 post type-post status-publish format-standard has-post-thumbnail hentry" id="post-734006"><span class="entry-date">July 5, 2023</span><div class="entry-header center-block text-center"><h1 class="entry-title">Two Questions To Ask Yourself if You’re Considering Buying a Home</h1><div class="shareBlock"><div class="shareTitle">Share</div><div class="shareIcons"><a aria-label="Twitter Share Link" class="twitter solid display-inline-block" data-tracking="Post,Social Post Link Clicked,Twitter" href="http://twitter.com/share?text=Two+Questions+To+Ask+Yourself+if+You%E2%80%99re+Considering+Buying+a+Home&amp;url=https%3A%2F%2Fgilliggroup.com%2Fblog%2Ftwo-questions-to-ask-yourself-if-youre-considering-buying-a-home%2F" target="_blank"><span class="force-hidden">Twitter</span></a>
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</div></div><div class="post-tax post-category"><span></span><a href="../category/realtor-blog/index.html" rel="tag">Realtor Blog</a></div><div class="post-tax post-post_tag"></div></div><div class="entry-content"><div><img alt="Two Questions To Ask Yourself if You’re Considering Buying a Home Simplifying The Market" decoding="async" loading="lazy" src="https://media.agentaprd.com/sites/222/20230705-two-questions-to-ask-yourself-if-youre-considering-buying-a-home.webp" style="display: block; margin-bottom: 5px; clear: both; max-width: 100%;" width="358"/>
<p>If you’re thinking of <a href="https://www.simplifyingthemarket.com/2023/06/19/saving-for-a-down-payment-heres-what-you-need-to-know/?a=712984-fa409495d5d70154d03a25e81e9540e2" rel="noopener noreferrer" style="color: rgb(5, 99, 193);" target="_blank">buying a home</a>, chances are you’re paying attention to just about everything you hear about the housing market. And you’re getting your information from a variety of channels: the news, social media, your real estate agent, conversations with friends and loved ones, overhearing someone chatting at the local supermarket, the list goes on and on. Most likely, home prices and mortgage rates are coming up a lot. </p>
<p>To help cut through the noise and give you the information you need most, take a look at what the data says. Here are the top two questions you need to ask yourself about home prices and mortgage rates as you make your decision: </p>
<h4><strong>1. Where Do I Think Home Prices Are Heading?</strong></h4>
<p>One reliable place you can turn to for that information is the <a href="https://pulsenomics.com/surveys/#home-price-expectations" rel="noopener noreferrer" style="color: rgb(5, 99, 193);" target="_blank"><em>Home Price Expectation Survey</em></a> from <em>Pulsenomics </em>– a survey of a national panel of over one hundred economists, real estate experts, and investment and market strategists. </p>
<p>According to the latest release, the experts surveyed are projecting slight depreciation this year (<em>see the red in the graph below</em>). But here’s the context you need most. The worst home price declines are already behind us, and prices are actually <a href="https://www.simplifyingthemarket.com/2023/05/16/the-worst-home-price-declines-are-behind-us/?a=712984-fa409495d5d70154d03a25e81e9540e2" rel="noopener noreferrer" style="color: rgb(5, 99, 193);" target="_blank">appreciating again</a> in many markets. Not to mention, the small 0.37% depreciation HPES is showing for 2023 is far from <a href="https://www.simplifyingthemarket.com/2023/06/05/oops-home-prices-didnt-crash-after-all/?a=712984-fa409495d5d70154d03a25e81e9540e2" rel="noopener noreferrer" style="color: rgb(5, 99, 193);" target="_blank">the crash</a> some people originally said would happen.</p>
<p>Now, let’s look to the future. The green in the graph below shows prices have turned a corner and are expected to appreciate in 2024 and beyond. After this year, the HPES is forecasting home price appreciation returning to more normal levels for the next several years.</p>
<p><a href="https://www.simplifyingthemarket.com/content/images/20230703/20230705-extimated-home-price-performance.png?a=712984-fa409495d5d70154d03a25e81e9540e2" rel="noopener noreferrer" target="_blank"><img decoding="async" src="https://files.keepingcurrentmatters.com/content/images/20230703/20230705-extimated-home-price-performance.png"/></a></p>
<p>So, why does this matter to you? It means your home will likely <a href="https://www.simplifyingthemarket.com/2023/06/16/how-owning-a-home-grows-your-wealth-with-time-infographic/?a=712984-fa409495d5d70154d03a25e81e9540e2" rel="noopener noreferrer" style="color: rgb(5, 99, 193);" target="_blank">grow in value</a> and you should gain <a href="https://www.simplifyingthemarket.com/2023/06/14/a-drop-in-equity-doesnt-mean-low-equity/?a=712984-fa409495d5d70154d03a25e81e9540e2" rel="noopener noreferrer" style="color: rgb(5, 99, 193);" target="_blank">home equity</a> in the years ahead, but only if you buy now. If you wait, based on these forecasts, the home will only cost you more later on.  </p>
<h4><strong>2. Where Do I Think Mortgage Rates Are Heading?</strong></h4>
<p>Over the past year, <a href="https://www.simplifyingthemarket.com/2023/06/07/the-main-reason-mortgage-rates-are-so-high/?a=712984-fa409495d5d70154d03a25e81e9540e2" rel="noopener noreferrer" style="color: rgb(5, 99, 193);" target="_blank">mortgage rates</a> have risen in response to economic uncertainty, <a href="https://www.simplifyingthemarket.com/2023/05/24/owning-a-home-helps-protect-against-inflation/?a=712984-fa409495d5d70154d03a25e81e9540e2" rel="noopener noreferrer" style="color: rgb(5, 99, 193);" target="_blank">inflation</a>, and more. We know based on the latest reports that inflation, while still high, has moderated from its peak. This is an encouraging sign for the market and for mortgage rates. Here’s why.</p>
<p>When inflation cools, mortgage rates generally fall in response. This may be why some <a href="https://www.fanniemae.com/media/47986/display" rel="noopener noreferrer" style="color: rgb(5, 99, 193);" target="_blank">experts</a> are saying <a href="https://www.mba.org/docs/default-source/research-and-forecasts/forecasts/2023/mortgage-finance-forecast-jun-2023.pdf" rel="noopener noreferrer" style="color: rgb(5, 99, 193);" target="_blank">mortgage rates</a> will pull back slightly over the <a href="https://cdn.nar.realtor/sites/default/files/documents/forecast-q3-2023-us-economic-outlook-04-27-2023.pdf" rel="noopener noreferrer" style="color: rgb(5, 99, 193);" target="_blank">next few quarters</a> and settle somewhere around roughly 5.5 and 6% on average.</p>
<p><a href="https://www.simplifyingthemarket.com/content/images/20230703/20230705-mortgage-rate-projections.png?a=712984-fa409495d5d70154d03a25e81e9540e2" rel="noopener noreferrer" target="_blank"><img decoding="async" src="https://files.keepingcurrentmatters.com/content/images/20230703/20230705-mortgage-rate-projections.png"/></a></p>
<p>But, not even the experts can say with absolute certainty where <a href="https://www.simplifyingthemarket.com/2023/06/13/your-needs-matter-more-than-todays-mortgage-rates/?a=712984-fa409495d5d70154d03a25e81e9540e2" rel="noopener noreferrer" style="color: rgb(5, 99, 193);" target="_blank">mortgage rates</a> will be next year, or even next month. That’s because there are so many factors that can impact what happens. So, to give you a lens into the various possible outcomes, here’s what you should consider:</p>
<ul>
<li><strong>If you buy now and mortgage rates don’t change:</strong> You made a good move since home prices are projected to grow with time, so at least you beat rising prices.</li>
<li><strong>If you buy now and mortgage rates fall (as projected):</strong> You probably still made a good decision because you got the house before home prices appreciated more. And, you can always refinance your home later on if rates are lower.</li>
<li><strong>If you buy now and mortgage rates rise:</strong> If this happens, you made a great decision because you bought before both the price of the home and the mortgage rate went up.</li>
</ul>
<h3>Bottom Line</h3>
<p>If you’re thinking about buying a home, you need to know what’s expected with home prices and mortgage rates. While no one can say for certain where they’ll go, expert projections can give you powerful information to keep you informed. Lean on a trusted real estate professional who can add in an expert opinion on your local market.</p>
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