The real estate market is volatile, and there is no way of predicting with any amount of certainty what prices will do from year to year. Still, experts do try to offer some insights into where they see the market going based on various factors and trends.
This is important information to anyone who might be considering buying or selling a home in the near future. While it’s impossible to say when a “perfect” time to buy or sell may be, some market conditions may create more favorable times if you have the ability and the patience to monitor the market for a while and wait until the most opportune moment for you.
To that end, here’s a look at what industry experts expect for home prices over the next five years.
Home Prices Will Continue to Rise
After the perfect storm of conditions caused home prices to skyrocket during the pandemic, they have started to come down a bit. But don’t expect them to fall through or for the market to crash. In fact, real estate professionals anticipate home prices will continue to rise, albeit not as drastically as during the height of the pandemic.
The Market Will Shift from Away from Seller’s Market
The high home prices of the last few years have created a solid seller’s market where buyers had to compete on price and even overpay for a house. Experts expect the balance between a seller’s market and a buyer’s market to return over the next few years. Though prices are going to continue to go up, those prices will be more in line with the actual value of homes rather than inflated.
Mortgage Interest Rates Will Likely Go Down
There are too many variables and unknowns to predict five years out what mortgage interest rates will be. However, over the next couple of years, experts do expect the interest rates on home loans to drop. Rates are hovering around five percent right now but could drop to below four percent in the future, but that is a highly speculative prediction.
If you plan to enter the real estate market as either a buyer or a seller in the next few years, keep in mind there is no way to absolutely predict the future of the market. However, there are some things you can do to prepare for when the time is right for you.
If you are looking to purchase a home, it’s never too early to start saving. Monitor interest rates and listings so you get a good idea of how much the house you want is going to cost. If you are potentially selling your house, monitor price trends and start prepping your house to sell. You can never be too prepared for entering the housing market as either a buyer or a seller.