Those who have been waiting for mortgage rates to come down have missed a huge financial opportunity.
Home prices rose 6% in 2022, 6% in 2023 and 4% so far year-to-date in 2024.
That means over the last 30 months home prices have risen on average 17% compounded.
Using a median home price of $350K 30 months ago – if you waited for rates to improve, you would have missed a $60,000 wealth creation opportunity.
But don’t let those statistics discourage you. Now’s a very good time to purchase, as appreciation gains look likely for the near future!
What the Experts Are Saying
Case-Shiller’s lead analyst, Brian Luke said “while annual gains have decelerated recently, this may have more to do with 2023 than 2024, as recent performance remains encouraging. Our home price index has appreciated 4.1% year-to-date, the fasted start in 2 years”
He goes on to talk about the cost of waiting, saying “the waiting game for the possibility of favorable changes in lending rates continues to be costly for potential buyers as home prices march forward.”
Mortgage Rates
Mortgage rates are near 12-month lows – as inflation seems to be coming down and the unemployment rate has moved higher.
Both of these are potential recession indicators, meaning that the Federal Reserve may cut the Federal Funds rate shortly. You can find out more here…
Pricing Pressure Ahead?
As rates move lower, more buyers will become eligible to purchase. In fact, the National Association of Realtors states that for every 1% decline in mortgage rates, 5 million more people can be eligible to buy.
Even if a small fraction of these eligible buyers decides to move forward, it will likely pressure prices higher and shrink the number of available home choices even further. More on that here…
The Bottom Line
Home price appreciation remains strong, despite higher mortgage rates and slightly increasing inventory.
Home values continue to set new all-time highs, and housing still proves to be one of the best investments out there. If you’ve been thinking about purchasing, now is a good time to do it!
Do reach out to me and we can strategize about your next purchase or refinance!
The blog postings on this site represent the positions, strategies or opinions of the author and do not necessarily represent the positions, strategies or opinions of Guild Mortgage Company or its affiliates. Each loan is subject to underwriter final approval. All information, loan programs, interest rates, terms and conditions are subject to change without notice. Always consult an accountant or tax advisor for full eligibility requirements on tax deductions.
