How to Navigate a Challenging Real Estate Market
So, you might be wondering how the latest housing market updates will impact your spring home buying plans. From Woodstock to Orford, here are the top three questions that we are being asked at the Farmers Market, the Coop and the Post Office and that might be on your mind, too.
1. What’s Happening with Home Prices?
If you’re keeping up with the news, you might be a bit confused about what’s happening with home prices in the Upper Valley. Despite what you may have heard in the news, home prices aren’t falling. It’s just that price growth is beginning to normalize. National and local data from several sources show that home prices have been going up consistently since early 2022. Whether you are looking for something in-town in Hanover or in the hills of Pomfret (a town where there are NO homes available for sale as of this writing), overall, the limited supply of homes for sale and ongoing buyer demand are going to keep upward pressure on prices.
2. What’s the Deal with Mortgage Rates?
Since October 2022, rates have been between 6% and 8%. The rates we experienced a few years ago, like 2.875%, are now a thing of the past. They are never coming back in my lifetime. But, as we have mentioned many times, the historical average for the 30-year fixed rate is just over 6.8%. The recent buzz is that the Fed will cut rates this year, but they failed to do so last week. So, no one knows where mortgage rates will go beyond current projections for things to settle around 6.5%. Even the experts can’t say with certainty what will happen next.
The best advice regarding interest rates is this: don’t try to control what you can’t control. This includes trying to time the market or guess what the future holds for mortgage rates. If you’re in the market for a new home, the experts at Higgerson Team recommend focusing your search on the right home purchase — not the interest rate environment.
3. What Does Low Housing Inventory Mean for My Move?
Housing inventory is measured by the number of available homes on the market. It’s also measured by months’ supply, meaning the number of months it would take to sell all those available homes based on current demand. Traditional wisdom states that the real estate market needs 5 to 6 months of housing supply to be balanced or not leaning toward either a buyer’s or seller’s market. Home sales data from the National Association of Realtors (NAR) shows inventory at a 3.6-month supply as of January. With inventory this low, it’s important to consider all housing types as you look for affordable options.
The housing market has predictable ebbs and flows that happen each year. It’s called seasonality. Spring is the peak home buying season when the market is most active. That activity is still strong in the summer but begins to wane as the cooler months approach. Home prices follow along with seasonality because prices appreciate most when something is in high demand. Working with Higgerson Team can help you in your search. Contact Rick, take a look at our current listings, or search homes for sale throughout the Upper Valley, and let us guide you home.