Spring is officially here and Cervone Deegan + Associates knows that many are speculating what will transpire in the real estate market this season. Whether you are interested in buying or selling a home there are some factors that present some uncertainty including rising inflation, interest rate variances and conflict overseas. Regardless of these items, the housing market has proven itself as being fairly immune. Here are some projections that some experts have shared for the spring season.
Mortgage Rate Increases
Freddie Mac has indicated that the average 30-year fixed rate mortgage has increased by over a full point in the past 6 months. Regardless of some adjustments in recent weeks, experts say rates will continue to rise over the next few months. 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.”
Housing Inventory Growth
Good news may be in the not too distant future for home buyers. Realtor.com has recently said that the number of newly listed homes has been on the rise for the past couple of months. The National Association of REALTORS® (NAR) has also shared that the months’ supply of inventory has increased for the first time in the past eight months. Typically the spring season is when inventory grows so the next few months could be promising with more homes getting listed for sale on the market. For buyers, this could mean more options to choose from soon while for sellers, listing now may make more sense as you avoid more future competition.
Increasing Home Prices
Prices are always going to be impacted by supply and demand. Despite the number of homes coming on the market expected to increase, the demand is still quite strong. Realtor.com states “During the final two weeks of the month, more new sellers entered the market than during the same time last year. However, 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.”
Ultimately while we may see both rates and inventory increase, the buyer demand is still quite great. Rates are not expected to go up too severely so home prices will most likely still increase just maybe at a more moderate pace as opposed to what we have seen in the recent past.