Pros predict what will happen in the housing market this spring
The spring home buying season is upon us — and even ahead of it, we saw home sales rise. Indeed, existing home sales rose 14.5% in February as compared to January, according to data from the National Association of Realtors (NAR). That’s true even though the number of homes for sale fell, according to Realtor.com.
What’s more, in January, U.S. home prices saw their seventh-straight monthly decline, according to the S&P CoreLogic Case-Shiller U.S. National Home Price index. (See the best mortgage rates you may get now here.) Now we’re into April and here’s what real estate experts and economists predict will happen in the housing market:
Prediction 1: Prices will decline in some markets
“Home prices have been falling for months in a lot of markets in the Pacific time zone and in Austin, Texas. Price growth has been slowing in the rest of the country and we might see a year-over-year decline in prices nationwide this spring,” says Holden Lewis, home and mortgage expert at NerdWallet.
Adds Jacob Channel, senior economist at LendingTree: “Going into April, home prices could continue to decline somewhat, though they probably won’t drastically decrease, nor will they even fall everywhere. Keep in mind that real estate tends to be very local, so even if prices do fall nationwide, that doesn’t mean that prices in every neighborhood will do the same.”
And Hannah Jones, economic research analyst at Realtor.com, says: “Home sales are likely to rebound seasonally, but the adjusted sales pace is expected to remain low as uncertainty and high costs limit transactions. I expect continued downward pressure on home prices.” (See the best mortgage rates you may get now here.)
But for his part Greg McBride, chief financial analyst at Bankrate, says prices might rise in some spots: “I don’t expect big moves in prices in the span of a month, but like the flower buds of spring, the housing market is showing signs of improvement. A pick up in activity with inventory still low does bode well for home prices,” says Greg McBride, chief financial analyst at Bankrate.
Prediction 2: There may be an uptick in buying activity …
“More buyers will keep coming out of the woodwork. We always see a seasonal uptick in home shoppers in March and April,” says Jeff Tucker, Zillow senior economist.
That said, this may depend somewhat on other factors: “April will bring us one step closer to the summer homebuying season and depending on what happens with things like inflation and the nation’s banking system, the housing market might show a pickup in activity,” says Channel.
Prediction 3: … So prepare for competition
“The market is still much friendlier this spring for buyers who can overcome affordability hurdles, but buyers are going to see more competition than they might expect because there are not many homes on the market to go around. New listings are increasing, which they almost always do this time of year, but not nearly as quickly as usual,” says Tucker.
Prediction 4: Mortgage rates are a wild card
As for mortgage rates, experts predict a rocky road ahead. “Mortgage rates will continue to fluctuate next month depending on new developments in the banking sector,” says Nadia Evangelou, senior economist and director of real estate research at NAR. (See the best mortgage rates you may get now here.)