So I can guess what you are thinking, especially if you are a buyer, is WHY in the world would I want home prices to rise? You want this for one very simple reason; nobody wants to invest in a losing asset.
The average person stays in their home for only 5-7 years. And that includes baby boomers and gen x'ers. Life is a moving target and you never know what changing circumstances would facilitate an up or downsize, change of climate, or lifestyle switch.
Since the timeframe is rather short, you want to ensure that your home is going to make you money; especially in the first few years and depending upon the type of mortgage product that you have, such as an adjustable rate mortgage. The more equity that you can gain and the faster that you can accumulate it, the more wealth that you will acquire in a shorter amount of time.
And of course, this is excellent news for sellers since all sellers are also buyers. You want to sell your investment for as much money as possible so that you have that extra profitability to either upgrade or create a nest egg.
Here is what the experts are saying:
Even though home prices are going up nationally, some people are still worried they might come down. In fact, a recent survey from Fannie Mae found that 24% of people think home prices will actually decline over the next 12 months. That means almost one out of every four people are dealing with that fear, and you might be, too.
To help ease that concern, here’s what experts forecast will happen with prices this year.
Experts Project a Modest Increase
Check out the latest home price forecasts from eight different sources (see graph below):
The blue bar on the left means, on average, experts think home prices will go up over 2% by the end of this year – not down.
Prices aren’t likely to depreciate in 2024 because inventory is still tight and lower mortgage rates are leading to strong buyer demand. Those two factors will keep pushing prices up as the year goes on. As Selma Hepp, Chief Economist at CoreLogic, explains:
“With mortgage rates dropping, demand for homes in early 2024 is likely to be strong and will again put pressure on prices, similar to trends observed in early 2023 . . . Most markets will continue to reach new home price highs over the course of 2024.”
What Does This Mean for You?
Experts are saying home prices will go up this year, and that’s good news if you’re thinking about buying a home. When you become a homeowner, you want the value of your house to go up. That appreciation is what builds equity and makes homeownership such a good investment over time.
Beyond that, expected home price appreciation also means if you’re ready, willing, and able to buy, waiting just means it will cost more later.
Smile and know that rising home prices means a bright future for everyone. Real estate is an investment above everything else!