Karen Cannon

Many people are hoping mortgage rates will come down before they buy a home. But will that actually happen? According to the latest forecasts, experts say rates will decline, but not by as much as a lot of people want.

The good news? Even if they don’t drop substantially, there are still ways to make buying a home more affordable.

How Much Will Rates Drop?

A few months ago, experts were forecasting mortgage rates could dip below 6% by the end of the year. But recent projections suggest that may not happen after all.

While mortgage rates are still expected to decline some later this year, projections from Fannie Mae, the Mortgage Bankers Association (MBA), and Wells Fargo now show them stabilizing closer to 6.5% by the end of the year (see below):

That means if you’re holding off on buying a home in hopes of much lower mortgage rates, you may be waiting a while. And if you need to move because something in your life has changed, like a new job, a new baby, or a marriage – waiting that long may not be an option.

Creative Financing Options in Today’s Market

Since rates aren’t expected to decline as much as originally expected, it may be worth considering alternative financing options that could help you get into a home sooner rather than later. Here are three strategies to discuss with your lender to see if any of these make sense for you:

1. Mortgage Buydowns

A mortgage buydown allows you to pay an upfront fee to lower your mortgage rate for a set period of time. This can be especially helpful if you want or need a lower monthly payment early on. In fact, 27% of agents say first-time homebuyers are increasingly requesting buydowns from sellers in order to buy a home right now.

2. Adjustable-Rate Mortgages

Adjustable-rate mortgages (ARMs) typically start with a lower mortgage rate than a traditional 30-year fixed mortgage. This makes them an attractive option, especially if you expect rates to drop in the coming years or plan to refinance later.

And if you remember the housing crash, know that today’s ARMs aren’t like the risky ones back then. Lance Lambert, Co-Founder of ResiClub, helps drive this point home by saying:

“. . . ARM products today are different from many of the products issued in the mid-2000s. Before 2008, lenders often approved ARMs based on borrowers ability to pay the initial lower interest rates. And sometimes they didn’t even check that (remember Ninja loans). Today, adjustable-rate borrowers qualify based on their ability to cover a higher monthly payment, not just the initial lower payment.”

In simple terms, banks used to give loans without checking to see if buyers could afford them. Now, lenders verify income, assets, and jobs, reducing the risks associated with ARMs compared to the past.

3. Assumable Mortgages

An assumable mortgage allows you to take over the seller’s existing loan — including its lower mortgage rate. And with more than 11 million homes qualifying for this option according to U.S. News, it’s worth exploring if you want or need a better rate.

Bottom Line

Waiting for a big decline in mortgage rates may not be the best strategy. Instead, options like buydowns, ARMs, or assumable mortgages could make homeownership more affordable right now. Connect with a local lender to explore what works for you.

How does this impact your homebuying plans this year?

This could be the year to sell your house – and here’s why. According to a recent NerdWallet survey, 15% of people are planning to buy a home this year. That’s actually a record high for this survey (see graph below):

Here’s why this is such a big deal. The percentage has been hovering between 9-11% since 2020. This recent increase shows buyer demand hasn’t disappeared – if anything, it indicates there’s pent-up demand ready to come back to the market.

That doesn’t mean the floodgates are opening and that there’s going to be a huge wave of buyers like we saw a few years ago. But this does signal there’ll be more activity this year than last.

At least some of the buyers who put their plans on hold over the past few years will jump back in. Whether they’re feeling more confident about moving, they’ve finally saved up enough to buy, or they simply can’t wait any longer – this is the year they’re aiming to take the plunge.

And, according to that same NerdWallet survey, more than half (54%) of those potential buyers have already started looking at homes online.

That’s a good indicator that a number of these buyers will be looking during the peak homebuying season this spring. So, if you find the right agent to make sure your house is prepped, priced, and marketed well, you can get your house in front of them.

Bottom Line

More people are going to move this year, and with the right strategy, you can make sure your house is one of the first they look at.

What do you think these buyers will love most about your house?

Let’s talk it over and make sure it’s front and center in your listing.

This is the time when a lot of people take a moment to reflect and set their goals for this year. And as you picture what you want your 2025 to look like, one thing that may pop into your mind is the vision of you in a new home. But how do you get there? And where do you start? 

Here’s some advice that can help you get the ball rolling. 

Focus on Your Why 

To lay the foundation, you need to focus on your why. While the dollars and cents are important, so is the driving force behind your desire to move. Maybe you need more space for a growing family, want to sell so you can downsize, or are finally ready to buy your first home. Whatever your reason, it’s important to keep it front and center. 

Your why is what helps you stay focused. Share your motivation with your agent and they’ll use their expertise to help support that goal, no matter what the market looks like. With a great agent by your side, you’ll have someone to guide you, problem-solve, and keep you moving forward until you can check that goal off your to-do list. 

Get Clear on What You Need 

Then it’s time to figure out what your next home needs to have. How many bedrooms do you need? If you don’t have a designated home office, is that a deal-breaker? What about a big fenced-in backyard? Knowing your must-haves and nice-to-haves makes the search a lot smoother. 

Since affordability is still tight, it’s important to have a clear idea of your essential items upfront. Maybe you can flex a bit on location, if it’s got everything else you’re looking for. Go over those essential items with your agent and they’ll help you focus on the homes that check the boxes that matter most while staying within your price range. 

Know Your Numbers 

Before you jump in, take a look at your finances. How much have you saved? What monthly payment feels comfortable? Getting clear on your budget early will help you know what’s possible. 

The best way to do this is by partnering with trusted real estate professionals, like a local agent and a lender. They’ll help you: 

• Plan for your down payment and look into down payment assistance programs 

• Understand the equity you have in your current home and how you can use it to fuel your next move if you’re selling 

• Get pre-approved for a mortgage so you know what you can borrow 

Lean on a Pro To Guide You 

It can be hard to know where to start, but you don’t have to do it alone. A real estate agent knows what you need to do to get ready to buy or sell, how to navigate the process, and can answer your questions every step of the way. As Bankrate puts it: 

“. . . now more than ever, it’s smart to lean on the guidance of an experienced local real estate agent. If you want to enter the housing market in 2025, whether as a buyer or a seller, let a pro lead the way for you.” 

Remember, buying or selling is a big milestone and a great goal for this year. With the right expert on your team, you’ll feel confident and ready to take on the market. 

Bottom Line 

If buying or selling a home is part of your goals for 2025, now’s the time to get started. Focus on your why, know what you need, and connect with trusted pros to make it happen. Let’s team up and make this the year you accomplish your real estate resolutions. 

The 2024 Presidential election is just months away. As someone who’s thinking about potentially buying or selling a home, you’re probably curious about what effect, if any, elections have on the housing market.

It’s a great question because buying or selling a home is a major decision, and it’s natural to wonder how such a major event might impact your plans.

Historically, Presidential elections have only had a small, temporary impact on the housing market. Here’s the latest on exactly what’s happened to home sales, prices, and mortgage rates throughout those time periods.

Home Sales

During the month of November, in years when the Presidential election takes place, there’s typically a slight slowdown in home sales. As Ali Wolf, Chief Economist at Zonda, explains:

“Usually, home sales are unchanged compared to a non-election year with the exception being November. In an election year, November is slower than normal.”

This is mostly because some people feel uncertain and hesitant about making big decisions during such a pivotal time. However, it’s important to know this slowdown is temporary. Historically, home sales bounce back in December and continue to rise the following year.

In fact, data from the Department of Housing and Urban Development (HUD) and the National Association of Realtors (NAR) shows after nine of the last 11 Presidential elections, home sales went up the next year (see graph below): 

The graph shows annual home sales going back to 1978. Each year with a Presidential election is noted in blue. The year immediately after each election is green if existing home sales rose that year. The two orange bars represent the only years when home sales decreased after an election.

Home Prices

What about home prices? Do they drop during election years? Not typically. As residential appraiser and housing analyst Ryan Lundquist puts it:

“An election year doesn’t alter the price trend that is already happening in the market.”

Home prices are pretty resilient. They generally rise year-over-year, regardless of elections. The latest data from NAR shows after seven of the last eight Presidential elections, home prices increased the following year (see graph below): 

Just like the previous graph, this shows election years in blue. The only year when prices declined after an election is in orange. That was during the housing market crash, which was far from a typical year. Today’s market is different than it was back then.

All the green bars represent when prices rose the following year. So, if you’re worried about your home losing value because of an election, you can rest easy knowing prices rise after most Presidential elections.

Mortgage Rates

Mortgage rates are important because they affect how much your monthly payment will be when you buy a home. Looking at the last 11 Presidential election years, data from Freddie Mac shows mortgage rates decreased from July to November in eight of them (see chart below): 

Most forecasts expect mortgage rates to ease slightly throughout the remainder of the year. If they’re right, this year will follow the trend of declining rates leading up to most previous elections. And if you’re looking to buy a home in the coming months, this could be good news, as lower rates could mean a lower monthly payment.

What This Means for You

So, what’s the big takeaway? While Presidential elections do have some impact on the housing market, the effects are usually small and temporary. As Lisa Sturtevant, Chief Economist at Bright MLS, says:

“Historically, the housing market doesn’t tend to look very different in presidential election years compared to other years.”

For most buyers and sellers, elections don’t have a major impact on their plans.

Bottom Line

While it’s natural to feel a bit uncertain during an election year, history shows the housing market remains strong and resilient. For help navigating the market, election year or not, let’s connect.

Should you buy a home now or should you wait? That’s a big question on many people’s minds today. And while what timing is right for you will depend on a lot of other personal factors, here’s something you may not have considered.

If you’re able to buy at today’s rates and prices, it may be better to focus on time in the market, rather than timing the market.

The Downside of Trying To Time the Market 

Trying to time the market isn’t a good strategy because things can change. Here’s an example. For the better part of this year, projections have said mortgage rates will come down. And while experts agree that’s still what’s ahead, shifts in various market and economic factors have pushed back the timing of when that’ll happen. Here’s how that’s impacted homebuyers who’ve been sitting on the sidelines. As U.S. News says:

“Those who put off buying a home during the past few years as they were holding out for lower mortgage rates have been left out of the market . . . mortgage rates have stayed higher for longer than previously expected, keeping monthly housing payments elevated. In other words, affordability didn’t improve for those who chose to wait.”

This is why timing the market may not pay off if you’re ready and able to buy now.

The Proof Is in the Pudding: How Homeowners Benefit from Rising Home Prices

Delaying your plans also means missing out on the equity you’d gain if you went ahead with your purchase today. And the potential equity gains that are at stake may surprise you.

Each quarter, Fannie Mae releases the Home Price Expectations Survey. It asks over one hundred economists, real estate experts, and investment and market strategists what they forecast for home prices over the next five years. In the latest release, experts are projecting home prices will continue to rise through at least 2028 (see the graph below): 

To give these numbers context, let’s take a look at a breakdown of what you stand to gain once you buy. The graph below uses a typical home’s value to show how a home could appreciate over the next few years using those HPES projections: 

In this example, let’s say you went ahead and bought a $400,000 home at the beginning of this year. Based on the expert forecasts from the HPES, you could gain more than $83,000 in household wealth over the next five years. That’s not a small number.

This data helps paint the picture of why time in the market really matters.

The Advice You Need To Hear If You’re Ready and Able To Buy Now

Right now, you may be focused on what’s happening with mortgage rates and how those impact your monthly payment, but don’t forget to factor in home prices.

Prices are expected to continue climbing, just at a more moderate pace. And while a moderate rise in prices may not be fun for you now, once you own a home, that growth will be a huge perk. That’s the time in the market piece.

Sure, you could try timing the market, but the equity you’ll be missing out on in the meantime is something to seriously consider. If you’re ready and able to buy now, you have to decide: is it really worth waiting?

Rather than focusing on timing the market. It’s better to have time in the market.

As U.S. News Real Estate sums up:

“There’s never a one-size-fits-all answer to whether now is the right time to buy a home. . . . There’s also no way to predict precisely what the market will do in the near future . . . Perfectly timing the market shouldn’t be the goal. This decision should be determined by your personal needs, financial means and the time you have to find the right home.” 

Bottom Line

If you’re debating whether to buy now or wait, remember it’s time in the market, not timing the market. And if you want to get the ball rolling and set yourself up for those big equity gains, let’s connect to make it happen.