Are you wondering if we’re in a housing bubble and it’s about to pop? There’s been one time in this country where homes lost significant value, and that was back in 2008. Back then, we saw homes lose value really for two reasons. First, loose lending standards. Second, cash-out refinances. Some people applied for loans they didn’t have to qualify for and then took out equity. That’s when homes lost value.
The bigger question is, what’s ahead? The Federal Reserve started off the month of May by raising the federal funds rate. They want to take the heat off the high inflation, which includes real estate home prices. According to Kiplinger’s latest forecast, the rise in the Treasury’s 10-year yield rate will push up mortgage rates from the current average of 5.4% for 30-year fixed-rate loans to near 6%.
Home prices are going up. Interest rates are going up. Here’s some perspective. The most recent updated home price forecast from seven respected forecasters believes, on average, 9% appreciation in 2022. The chart [below] falls between eight and 10%. The year started off with about 5% appreciation, and it’s risen slowly every month since.
Buyer demand is still strong. So many buyers are in the market, and there are so few homes for sale. Bottom line, as a homeowner, you’re still in command, and your home’s value will continue to increase, just at a slower pace.
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If you want to leverage the gains you’ve made from homeownership, please contact us for a complimentary professional assessment of what your home may be worth in today’s market based on sales for homes similar in size (bedrooms, baths, and square footage). However, for a more accurate home value, we would need to see the inside and outside of your home to compare it to other sold homes with similar characteristics.
