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Housing Market Forecasts for the Second Half of the Year

From rising home prices to mortgage rate swings, the housing market has left a lot of people wondering what’s next – and whether now is really the right time to move. There is one place you can turn to for answers you want the most. And that’s the experts.

Leading housing experts are starting to release their projections for the rest of the year. These insights will give you clarity – and a little more optimism than you might expect. Business Insider sums up the forecasts (and why they’re good news for you):

“As mortgage rates go down this year, affordability may improve slightly for homebuyers. Inventory is also expected to grow, which should help moderate price growth and make finding a home easier.”

Let’s break it down.

1. Mortgage Rates Should Come Down (Slightly)

While a major drop isn’t on the table, forecasters are calling for a modest decline in rates in the months ahead as the economic outlook becomes more certain. Based on the information we have right now, here’s a look at where they say rates should be by year-end (see graph below):

Even this slight decrease is a welcome change. A seemingly small decline can still help bring down your future mortgage payment and give you a bit more breathing room in your budget.

Just remember, everything from inflation to employment and broader economic shifts will have an impact on where rates go from here. So, don’t try to time the market. And do expect some volatility along the way.

2. Inventory Will Continue To Grow

Inventory has already improved a lot this year. A big portion of the growth the market has already seen is because homeowners are getting tired of sitting on the sidelines. They’ve tried the wait and see approach with rates, and it hasn’t really paid off. And at a certain point, you need to move no matter what the market is doing. This is one reason more homes have been listed lately. And experts say that should continue. As Lance Lambert, Co-founder of ResiClub, says:

“The fact that inventory is rising year-over-year . . . strongly suggests that national active housing inventory for sale is likely to end the year higher.”

If rate forecasts pan out as the experts say, that could be enough to tip some more sellers off the fence and back into the market – giving you even more options for your move.

3. Home Prices Are Moderating

As more homes hit the market, there will also be less upward pressure on home prices. Expert forecasts are still calling for growth, but the pace of that growth is slowing down as inventory climbs. The average of all 7 forecasts shows prices will rise about 2% this year (see graph below):

That means you could finally get a little bit of relief from rapidly rising home prices. When you combine the forecast for healthier price growth with projections for slightly lower mortgage rates, that could mean more buying power in the months ahead.

Keep in mind, though, the housing market is hyper-local. So, this is going to vary by area. Some markets will see prices climbing higher. We are seeing this in certain neighborhoods here in Albuquerque, where some homes are much more difficult to get traction and attention, while others are still moving very rapidly! And some may even see prices dip a little if inventory is up significantly in that location.

Bottom Line

So, if you want or need to move this year, know that the experts say things should start looking up. Let’s connect so you can take advantage of any market shifts that work in your favor.

Stocks May Be Volatile, but Home Values Aren’t

With all the uncertainty in the economy, the stock market has been bouncing around more than usual. And if you’ve been watching your 401(k) or investments lately, chances are you’ve felt that pit in your stomach. One day it’s up. The next day, it’s not. And that may make you feel a little worried about your finances.

But here’s the thing you need to remember if you’re a homeowner. According to Investopedia:

“Traditionally, stocks have been far more volatile than real estate. That's not to say that real estate prices aren't ever volatile—the years around the 2007 to 2008 financial crisis are just one memorable example—but stocks are more prone to large value swings.”

While your stocks or 401(k) might see a lot of highs and lows, home values are much less volatile.

A Drop in the Stock Market Doesn’t Mean a Crash in Home Prices

Take a look at the graph below. It shows what happened to home prices (the blue bars) during past stock market swings (the orange bars):

Even when the stock market falls more substantially, home prices don’t always come down with it.

Big home price drops like 2008 are the exception, not the rule. But everyone remembers that one. That stock market crash was caused by loose lending practices, subprime mortgages, and an oversupply of homes – a scenario that doesn’t exist today. That’s what made it so different.

In many cases before and after that time, home values actually went up while the stock market went down, showing that real estate is generally much more stable.

This graph shows how stock prices go up and down (the orange line), sometimes by more than 30% in a year. In contrast, home prices (the blue line) change more slowly (see graph below):

Basically, stock values jump around a lot more than home prices do. You can be way up one day and way down the next. Real estate, on the other hand, isn’t usually something that experiences such dramatic swings.

That’s why real estate can feel more stable and less risky than the stock market.

So, if you’re worried after the recent ups and downs in your stock portfolio, rest assured, your home isn’t likely to experience the same volatility.

And that’s why homeownership is generally viewed as a preferred long-term investment. Even if things feel uncertain right now, homeowners win in the long run.

Bottom Line

A lot of people are feeling nervous about their finances right now. But there’s one reason for you to feel more secure – your investment in something that’s stood the test of time: real estate.

Thinking of Buying or Selling?

We are happy to sit down with you and talk about it! We have a no hassle,

no obligation buyer and seller consultation that has

proven to bring clarity to your real estate goals.

Call/Text Jason 505.401.6178

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Jason and Bree Dencklau

Coldwell Banker Legacy

The Dencklau Team

Jason: 505.401.6178

Bree: 505.331.8623

Visit: www.HomeBuyingABQ.com

Thank you for your time today

We look forward to working with you now or in the future

Jason and Bree Dencklau

If your property is listed with a real estate broker, please disregard. This email is for informational purposes only and it is not our intention to solicit the offerings of other real estate brokers.