Here comes the spring housing market and many folks are curious about predictions for the upcoming season.
While there are multiple factors causing some uncertainty, including the conflict overseas, rising inflation, and the first rate increase from the Federal Reserve in over three years — the housing market seems to be relatively immune and continues to be strong in most bay area locations.
Here’s a look at what experts say you can expect during the spring buying season:
1. Mortgage Rates Will Climb
Freddie Mac reports the 30-year fixed mortgage rate has increased by more than a full point in the past six months. Experts believe rates will continue to edge up over the next 90 days. As Freddie Mac says:
“The Federal Reserve raising short-term rates and signaling further increases means mortgage rates should continue to rise over the course of the year.”
Waiting to buy will likely mean you’ll pay a higher mortgage rate on your purchase. And that higher rate not only drives up your monthly payment but can really add up over the life of the loan.
2. Housing Inventory Will Increase
There may be some relief coming for buyers searching for a home to purchase. Realtor.com recently reported that the number of newly listed homes has grown for each of the last two months and the next 90 days could bring more listings to the market.
If you’re a buyer who has been frustrated with the limited supply of homes available for sale, it looks like you could find some relief this spring. However, be prepared to act quickly if you find the right home.
If you’re a seller, listing now instead of waiting for this additional competition to hit the market makes sense.
3. Home Prices Will Rise
Prices are always determined by supply and demand. Though the number of homes entering the market is increasing, buyer demand remains very strong. As realtor.com explains in their most recent Housing Report:
With 5.8 million new homes missing from the market and millions of millennials at first-time buying ages, housing supply faces a long road to catching up with demand.”
With the demand for housing still outpacing supply, home prices will continue to appreciate. Many experts believe the level of appreciation will decelerate from the high double-digit levels we’ve seen over the last two years. That means prices will continue to climb, just at a more moderate pace.