Prediction 1: Mortgage rates are a wildcard
“Buyers who had been sitting on the sidelines were likely encouraged by mortgage rates that fell from higher than 7% in November to just about 6% in early February. But while it’s widely expected that rates will fall this year, mortgage rates shot up in early February, showing that no one can count on a consistent downward trajectory for rates this year. If rates rise in March, buyers could pull back right as many sellers are planning to list their homes,” says Jeff Tucker, senior economist at Zillow.
Prediction 2: Prices will remain relatively stable
Heading into March and the official start of spring, experts think it’s likely that prices will stabilize. “We’re still seeing market volatility as interest rates continue to rise, but I think prices will remain close to stable since we still have a lack of inventory,” says Aaron Kirman, founder of AKG Christie’s International Real Estate.
Prediction 3: More people will be looking to buy
‘Tis the season for buyers to start house hunting. “Buyer traffic is expected to pick up in March like it always does at this time of year and more sellers will list their homes than in January or February,” says Tucker.
Prediction 4: Housing inventory will remain an issue
“A large number of homeowners refinanced in the last couple of years at historically low-interest rates and giving that up and trading it in for one that is a hair away from 7% means people are choosing to stay unless they absolutely have to. Homeowners are literally sheltering in place, hoping for rates to drop and other homeowners to drop their prices so they can afford what they want. The problem is everyone is doing this simultaneously causing the real estate version of a standoff. Unless we see rate relief, we’ll see this trend continue in March,” says Dave Speers, general manager of brokerage at Houwzer, a real estate and mortgage brokerage firm.
Prediction 5: Buyers will snap up second homes
“Housing remains a primary investment for the world’s most affluent citizens and a safe hedge against inflation,” says Mauricio Umansky, CEO of billion dollar brokerage firm The Agency. “The luxury market is strong and there is much wealth to be distributed across markets and generations. I think a lot of buyers are still ready to buy and are collectively waiting for the next move once markets have stabilized. Now buyers can finally purchase a property at more realistic pricing without being completely outbid. We’re also seeing interesting trends that I believe will continue like buyers snapping up what would be considered their second homes first, using them as investment properties. With the US dollar remaining strong, buyers will continue looking overseas for their next purchase, from Mexico to Canada and Europe to Asia.”
information provided by: MarketWatch.com