There is a lot of confusion in the housing market today. In this video, I’m going to talk about three most important questions or concern that are in the homebuyers, home sellers and real estate people today. So let’s analyze those three questions. 

 

What are those three questions? What are those three concerns? How will it impact the housing market if you’re looking to buy or sell in 2024, and beyond? Anywhere you go today, the conversation is always housing market. When you talk to your friends, you hear something else. When you talk to realtors, lenders, title companies, attorneys, there’s a different conversation or a different take on it. And when you look at news or YouTube channels or social media, it’s a whole new angle to real estate. So there is a lot of confusion. So in this video, I’m going to analyze that question by question. 

 

The number one question in everybody’s mind, whether you’re a buyer or a seller or investor, is where are interest rates headed next? Great question. As you know, in real estate, interest rate is what we call a time bomb. It can accelerate the market, as it did in 2021 and 2022, with a low, low, low interest rate. Everybody refinanced and everybody was jumping to buy homes. There were 6 million homes sold in 2021. In 2023, there’s going to be almost 4.5 million homes sold, significantly less homes. And one of the major reasons is because of the interest rate, a lot of people who could afford a home with 4%, 5%, 6% cannot afford any more homes because they went up to 7.5% – 8%. So mortgage rates are very critical in home shopping, and they have been high. They’ve been at a peak few months ago at 8%, to the benefit of buyers and sellers. 

 

For sellers who want to sell and move and buy another house, it’s also beneficial because as the rates drop, you are more able to buy a house. Millennials who are trying to buy home for the first time, maybe with a student loan or without a student loan, can afford a house with five or 6%, but may not qualify with an 8%. So that’s good news for the mortgage. The outlook is that the mortgage rates will drop. As you know, the mortgage rates and inflation go hand in hand. The higher the inflation rate, the higher the mortgage rates. Inflation has dropped, and we can see that interest rate has dropped. Like I mentioned earlier, it was at 8% few months ago. It’s near 7% today, which is good news. And the prediction is that they’re going to be lower than 7% come spring in 2024.

 

According to Aziz Sundarji, a strategist. He says that the bottom line is that interest rates are likely to be lower, perhaps even lower, than many optimists think, in the weeks and months to come. That’s great news because the lower the mortgage rate, the more home you can buy, and the people who are just waiting for the rates to drop can finally go and buy because they can finally qualify for a loan. 

 

The second question, or second concern about the housing market with all the buyers and sellers and even realtors, because we can’t sell if people cannot qualify or if there’s no homes on the market. So the second question is, where are home prices headed? Are they going up or are they going down? Everybody that I talk to wants the prices to go down. People are actually expecting a recession so they can buy a house. That’s not a good way to look at things. You want to buy a home when you can buy a home. Don’t expect a recession or dire situation where you are able to buy a house. 

 

As you know, home sales and home prices are tied to the inventory. The more the inventory, the more sales there are, and the prices don’t go up too high. As you know, in the recession in 2008, there were so many homes for sale, which caused the home prices to drop and drop and drop. In the last two or three years, actually four or five years, inventory has been down. In fact, it is so low right now, it has at the lowest point in the last 30 to 40 years. So as long as the inventory stays low and as long as there is demand for homes, regardless of interest rate and home prices, people are buying homes, which means that if people are buying homes and there’s actually multiple offers, even today in November, 2023, the prices can only go up. And I can say that all day long. But let’s look at the data, and not just not my opinion, but let’s look at this data which shows that the prices are going to go up. 

 

The question is how much are they going to go up in the next few years? This home price survey has been done with over 100 strategists and economists. So according to HPES, if you look at this chart, it shows the estimated home price performance December to December as forecast in quarter three, 2023. So if you look at 2023, the price is going to be up 3.32% from last year. It’s going to be up. Everybody that we talked to last year or even the year before said that the prices are coming down. The prices are coming down in a housing market is going to bust. There’s going to be a recession, there’s going to be foreclosures. Did not happen. They went up 3.3%. And if you look at the forecast for 2024, it’s going to be up 2.7% from December 2023. And if you go along in 2026 and 2027, let’s look at 2027, they predict a home price increase of 4.18%. So if you look at the charts here, and this was a survey done by economists and strategists, prices are going up and up and up in the next four or five years. One statistic that I may want to share with you is that for the first time in history, prices after the recession started going up in 2010, 2011, they’ve been going up for the last eleven years, which is a history of increased rate in a row. But if we add this forecast, that adds a 15 year price increase, that has never happened before. So let’s see what happens. If there are any other external factors, global wars, AI disaster, which could happen, let’s see what happens. But the next three, four, five years, according to these strategists and experts and economists and gurus, which they could be wrong, but there’s a lot of them together in this pot, they’re saying there’s going to be increase in home prices for the next three, four, five years. 

 

And the third question, or the third concern with all the consumers, buyers, sellers, realtors, vendors, stock market people, the question is, is there a recession around the corner? Well, if I have to answer that, yes, there’s a recession around the corner. The problem is the corner is so big, we keep turning the corner. It’s not coming. So yes, recession is around the corner, but the question is, how big is the corner? Repeating myself from what I said earlier, a lot of the buyers and sellers want to predict that there’s a prices drop, rates drop, so they can buy homes, and they’re actually expecting a recession or a foreclosure so they can buy home. Not a good way of thinking. But all the data shows that there is no recession ahead. And I’m not saying that. Let’s look at the data and the expert predictions and the polls that experts have done and look at what they are saying. 

This poll was done and this chart is from Wall Street Journal. And what the Wall Street Journal is saying is that do experts think a recession is coming? Well, in October 2022, when they did the poll, 63% said, yes, there is a recession coming. And 37% said no, there is not a recession coming. This poll was taken again, or the poll was done again. So as of October 2023, now the yeses are 48% compared to 63% and the no’s are 52% compared to a no of 37% last year. So despite the higher interests that we’ve had, despite the home prices that have gone up, despite the big demand, despite the lower homes for sale, despite everything being expensive, there is no forecast for a recession, not yet. 

 

So the good news is there is no recession, according to these experts. But again, nothing is predictable. But according to the polls, we can see what’s coming up. Nothing changes overnight. For the rates to go down, it takes few months. For the home prices to go down or up, it takes few months, few years. So for the recession to come, it’s not going to happen overnight. So even if it does come, it’s going to take its time. But right now, now there is no recession coming. According to this poll and according to these experts, the data shows that there is no recession. If you would like more information, direct message me or I can refer you, an agent in your.