Welcome to 2024 and a changing real estate market, easing mortgage rates and an increase of activity throughout central Arizona!
We will be looking at the forecast for 2024 rates and prices in real estate, but first, lets look at the market today:
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Simply put, we are seeing MORE homes coming to market and they are also being SOLD MORE QUICKLY. This has been driven by easing rates from 8% in November to NOW they are in the mid-6s. Thus our "less than 90 day" supply is moving us closer to a seller's market. Currently most sellers are willing to participate in some concessions but that may change.
So what do we expect for mortgage rates and prices? Here are the headlines:
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What we know: The FED has indicated recently that with the easing of inflation they expect to make 3 rate cuts this year, a week later Goldman Sachs wrote that they expect 5 cuts this year. Regardless of how many and even how much, it is widely accepted that there will be rate cuts.
For some historical context, since 1971, the average mortgage rate has been 7.4%. So today we are well below that mark and have seen that the lower rate is increasing activity in the real estate market. Most experts are not predicting drastic rate cuts and most expect 6% and possibly into the 5s by the end of the year.
AND, THE ELEPHANT IN THE ROOM... unfortunately I can find no experts who think we will see 4s or 3s in the foreseeable future. So with expected rate cuts what is expected of home prices?
The consensus is that home prices will continue to rise over the next 5 years. So with rates likely to ease more, prices will continue to climb and we are already seeing increased activity in the real estate market.
BACK TO THE QUESTION: Buy NOW or wait?
BUY NOW, if you can, here's why!
1. You will buy at a lower price
We know that experts are projecting home prices to rise nationally. Locally Arizona has a higher influx of people and businesses, meaning we will likely outpace the national numbers. Buying now saves on price!
2. You retain flexibility to refinance and will build equity
Equity is built as you make payments, and accelerated when you buy sooner than later. Additionally, instead of hoping to time it right you will have the flexibility of seeing what happens and you can take advantage if rates go lower by refinancing for a lower rate while also having the lower price locked in.
3. You get to enjoy the benefits of a home that meets your needs/wants
Most importantly is that for many people needs have changed and making a move will give you a more comfortable home that accommodates your needs and enhances your daily life. The longer you wait the more costly and more competitive the market will be.
How do you make the most of the market? Contact us at The Drew Team, we have years of experience having served over 1000 clients in reaching their goals. We also have great partners to help us put you in the best position. Ready to reach YOUR goals, contact us today!
The Drew Team is Robin and Steven Drew, Robin McAvoy, Casey Hurlburt and Tom Walton. 7 years running we have been named to Real Trend's America's Best Small Agent Teams because our aim is only to reach YOUR goals!
