As mortgage rates are increasing and home prices are continuing to increase many hopeful buyers are questioning what is going to happen with home values in the next few years. Some hoping to purchase a home in the near future are finding concern with the recent significant jump in home prices and they are hoping that it will not lead to a similar housing crash as we saw in 2008.
The comforting news is that several real estate experts are saying the real estate market is not headed for a disastrous crash. They are saying that there are several signifiers that are opposite from what was experienced in the last housing recession. Some experts agree that home price appreciation needs to slow down to remain sustainable but that the growth that is being experienced right now is mostly driven by the short supply of homes for sale.
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Appreciation Expectation Numbers for the Next Few Years
It is predicted that price appreciation is going to slow out of the double-digit range that we have seen over the last two years going through 2022 and into the future. But many experts do not expect there to be any depreciation in home values coming around the bend.
The company Pulsenomic has released a home price expectation survey. This survey is a national panel of over 100 expert economists, real estate experts, and investment market strategists. The data from this report shows that home prices are going to continue to increase for the next five years according to all who participated. According to the survey it is expected that home prices will increase 9% this year and increase at slower rates over the next five. The 2023 prediction of appreciation is 4.74%. For 2024 the predicted rate is 3.67%. But there is no depreciation expected over the next five years.
What does this mean for buyers?
A limited number of homes listed for sale and prices increasing as well as mortgage rates going up can make for a challenging time shopping for a home. It may seem like it would be better to purchase a home when prices are not rapidly increasing. Like it would be better to hold off for a couple of years.
But purchasing a home now could come with its own set of benefits. Even if you wait to purchase a home you will still be paying more than you would now according to predictions even as the appreciation rate slows it’s still a rate of appreciation, not depreciation.
Purchasing now also allows a buyer to take advantage of expected future price increases and let them work for you. These increasing home prices help a homeowner to build value and retain equity and as such build their own personal wealth portfolio.
Deciding whether to purchase right now or hold off for a little bit can be a difficult question but the key to knowing the answer is to be knowledgeable of what is predicted of the market in both the real estate and the mortgage world.
Though mortgage interest rates have increased they are still not insanely high. It may be better to purchase a home while prices are lower than playing a gambling game where mortgage interest rates will end up in a few years.
For more information on real estate on the Forgotten Coast including homes in Apalachicola and surrounding areas please contact us anytime.
Additional: Buying on a Budget in 2022