“Higher for longer” is a really great objective if you are a glider pilot. It’s a good practice for mountain climbers. Keeping your heartrate elevated for extensive periods is also great if you an endurance athlete. Maintaining a larger balance in your bank account is likewise a smart practice.
Formidable interest rates however are not as desirable for those of us who have a vested involvement in the housing market. I talk with roughly a dozen potential homebuyers every day and the overriding concern shared among the overwhelming majority of them is affordability. Doubling the existing house payment for the luxury of one additional bedroom is daunting. Current renters are just as astounded to see that a house payment is a significantly larger portion of their income than they had hoped.
However, those that are investing in real estate right now are finding less competition, greater negotiating power, and an opportunity to buy before prices make their next move higher. Real estate values are anticipated to increase another 6.5% in 2024 per a Fortune survey that includes economists from Zillow & CoreLogic. Fannie Mae, who plays a defensive position due to the nature of their role in collateralizing debt, now sees home prices rising 3.9% next year, compared to the previous year’s forecast of a 2.2% decline.
Mortgage rates are at 15 year highs and holding.