Is it a good time to buy a home? Should you sell your current house and make a move? Housing market forecasts can help you think through those questions, but they cannot make the decision for you.
The clearest way to read a forecast is to focus on three connected factors: mortgage rates, the supply of homes for sale and home prices. Each affects the choices buyers and sellers face.
The figures and expert comments below come from the original article’s outlook. They are historical observations and projections, not a forecast for your next purchase. Their practical value is in explaining how these market forces work together.
Mortgage Rates and Inflation Are Connected
No one has a crystal ball that can tell buyers exactly where mortgage rates will go. The original outlook emphasized that the record-low rates seen during the pandemic were an outlier, not the norm.
It also reported that rates had climbed more than 2% during the period it covered, attributing that increase to the Federal Reserve’s response to rising inflation. Its warning was straightforward: if inflation kept rising, mortgage rates would likely respond.
Greg McBride, identified in the original article as Chief Financial Analyst at Bankrate, explained the uncertainty this way:
“Until inflation peaks, mortgage rates won’t either. Without improvement on the inflation front, we don’t know where the interest rate ceiling will be.”
That comment explains the outlook’s reasoning. It is not a promise about when rates will peak or how far they will move.
What This Means for Your Buying Plans
Whether you are buying your first home or selling one house to purchase another, the mortgage rate available to you matters. Rising rates affect affordability and purchasing power.
Instead of making your entire plan depend on a rate prediction, ask a mortgage professional to help you understand your options. The goal is an informed decision, not a guess about the perfect moment to act.
Keep your questions practical: What does the financing look like for the purchase you are considering? Are you comfortable with it? What would you need to reconsider if rates changed before you moved forward?
More Homes for Sale Can Give Buyers More Options
The original article described a growing supply of homes for sale. It pointed to two reasons: more homeowners were listing their houses, and higher mortgage rates were helping ease the intensity of buyer demand.
When demand moderates, the pace of home sales slows. That, in turn, can help inventory rise.
The article cited a revised realtor.com inventory forecast as evidence of that expected growth. The projection increased from a 0.3% gain in homes for sale to a 15.0% gain over the forecast period.
Those figures describe a specific historical forecast. They should not be treated as an expectation for inventory in your own home search.
More Inventory Does Not Necessarily Mean a Surplus
The original outlook made an important distinction: more choices did not mean a sudden surplus of homes. Supply was still described as low, even as it increased.
Its expectation was that finding a home would become less difficult than during the preceding period of exceptionally tight supply, but not necessarily easy. Buyers were still encouraged to work with an agent, watch available listings and be prepared to act when the right home appeared.
Use that distinction when discussing your search. Ask your agent what is available in your market rather than assuming that a broad inventory forecast means you will have plenty of suitable homes to choose from.
Slower Price Growth Is Not the Same as Falling Prices
The original article attributed the pandemic’s record-breaking home price increases to an imbalance between available homes and buyers looking to purchase.
It cited CoreLogic’s report of 15% annual appreciation during the period discussed, followed by continued price increases. Although inventory was growing, the outlook described more buyers than homes for sale, maintaining upward pressure on prices.
For that reason, the experts cited were forecasting continued appreciation at a more moderate pace, rather than price declines. The average appreciation projection presented in the article was about 8.5% for its forecast period.
Again, that was a projection, not a guaranteed result or a standing forecast for future purchases.
Understand Deceleration Versus Depreciation
Deceleration means prices are increasing more slowly. Depreciation means prices are declining. The original outlook called for the first, not the second.
Selma Hepp, identified in the original article as Deputy Chief Economist at CoreLogic, explained the reasoning:
“The current home price growth rate is unsustainable, and higher mortgage rates coupled with more inventory will lead to slower home price growth but unlikely declines in home prices.”
The practical lesson is to read price forecasts carefully. A prediction of slower growth is not the same as a prediction that homes will become less expensive.
Consider Both Sides of a Move
For homeowners planning to sell and buy again, the original forecast had two implications. It did not project a decline in the value of the home being sold, but it suggested that waiting could mean paying more for the next home if appreciation continued.
That was the basis for its suggestion that buyers consider moving before prices climbed further. It also pointed to appreciation as a way a purchased home could gain value.
Neither point should be read as a guarantee. A forecast does not establish what your home will sell for or promise that your next purchase will increase in value.
Use the outlook to frame a conversation about your plans, not to pressure yourself into a decision.
Turn the Forecast Into a Practical Plan
You do not need a perfect prediction to ask useful questions. Start with these:
- How does the available mortgage rate affect the purchase I am considering?
- What homes are available that fit my search?
- Does the price outlook describe slower growth or actual declines?
- If I am selling and buying, have I considered both transactions?
Your next step is to write down your goals and review them with your real estate and mortgage professionals. Reach out to Ed Parcaut to discuss your financing questions and put together a practical plan for your move.
