Over the past few weeks, the Federal Reserve raised the federal funds rate another quarter point, bank failures occurred, and home sale prices in some markets posted an annual drop for the first time in a decade.
So how did we get here, and what should we expect next?
Let’s take a look!
The Fed’s acknowledgment of inflation in March 2022 led to rate hikes, impacting financial markets and leading to the failure of banks like Silicon Valley Bank. However, government intervention has shown a commitment to bank stability. The Fed’s recent decision to raise the fed funds rate also highlights their commitment to taming inflation.
Remember, mortgage rates follow inflation. The Fed is working hard to decrease it, so keep an eye out for long-term interest rates potentially coming down as well.
So is now a good time to buy, or should you wait?
Buy or wait? How to make the right decision in today’s uncertain economy.
Buy or wait? That’s the dilemma many of my clients are facing, given the current economic environment.
Here are 2 questions every potential buyer should ask themselves:
Am I financially stable with a down payment and savings for unexpected expenses?
Will I be in this area for at least 3-5 years?
If you answered yes to both, buying now makes sense. If not, wait until you can say yes to both.
Timing the market isn’t as important as being in the market for the long term. In the past 30 years, home values have increased by an average of 298%. Homeownership always wins in the end.
So, don’t wait for the perfect moment, but for the right life events to occur.
Housing market outlook for the rest of 2023 and beyond
What does the rest of the year and beyond look like for the housing market? As a real estate agent, it’s one of the most common questions I get from clients.
Here’s my take:
My overview of the market is shaped by the fundamentals. We started this year with a shortage of not just existing, but specifically new home inventory. This has been an ongoing issue for several years, and the pandemic certainly didn’t help.
While some are trying to compare our current market to 2008, there are major differences. We are not in the same boat as we were then. There is an enormous amount of equity in homes today compared to 2008. Also, the low inventory continues to create an environment where the number of buyers desiring to purchase a home cannot be satisfied by the current inventory.
My prediction? Buyers will continue to be interested in purchasing this spring and summer. The question is whether sellers will be willing to adjust their pricing and expectations to a place where buyers see value and transactions can occur.