Spring is nearly here, and with its entrance (and the exit of the winter season) comes a renewed interest in how the housing market will develop. 30-year fixed mortgage rates are steadily rising, inventory continues to decline, and buyers are feeling the pressure across the country. Let’s take a look at some of the top theories for how the spring housing market might develop.
Will mortgage rates continue to rise?
Many industry leaders are anticipating a further rise in mortgage rates that attempt to slow down the hot market we’ve been in for the past two years. Since the start of 2022, rates have been steadily creeping toward the 4 percent mark. Check out this Compilation of Weekly Survey Data by Freddie Mac to see how the average mortgage rate has developed throughout the year. If the pattern for 2022 so far is any indicator, this assumption is very likely.
Will real estate prices continue to surge?
Experts anticipate prices to continue on their upward trajectory, but not as steeply as before. Realtor.com predicts a rise in sales prices of 2.9 percent, that’s far less than the 16.9 percent increase CNN reports for 2021 home sale prices. While mortgage rates continue to rise, this steady (but slowed) increase in prices stems from the continued lack of inventory. Supply just can’t keep up with demand as new builds continue to face supply chain difficulties as well.
Home values will also continue their rise
Something that may not immediately occur to you when you conjure up images of what this Spring market will look like, is an increase of home values. Especially with all the focus being predominantly on sales and inventory. Rocket Homes cited data they collected stating home values were up 10.7 percent from January 2020 to January 2021, and from January 2021 to November, prices were up 17.5 percent. Rocket Mortgage believes this rise in home value will only continue.
What does all this mean?
The only thing that is certain, is uncertainty. Many industry leaders expect the housing market to pick up this Spring as we’ve been seeing a return of seasonality, but there are still so many factors at play that we just can’t say for sure. What does your team have to say?
Regardless of how this season evolves, know that The Warren Group has your back with the latest data in your market. Our Data Solutions grant you access to property data, real estate listing data, mortgage and foreclosure data, and a lot more, all of which allow you to track market trends for yourself. Stay ahead of the competition with data designed to suit your business objectives. Reach out to a data specialist today and ask what our data can do for you and your team.