Since the pandemic, the real estate market has seen high mortgage rates and higher home prices. According to the National Association of Realtors (NAR), the median home sale has reached about $394,300 which is a 2.8% increase from last year. Existing home sales has reduced by 2% and the average number of days an existing home remained on the market in September was 21 days, which is up 2 days from last year.
What does this mean for home prices over the next five years? Industry experts predict that housing prices will gently climb due to low supply and high demand. This said, they believe they will level off in terms of the percentage the prices will increase with around 3-3.5% growth each year.
How about mortgage rates? The predictions seem consistent that mortgage rates will continue to climb due to inflation but will level off or slightly decrease in four or five years. If you’re a home buyer, lock in rates now before they climb higher over the next few years.
Housing inventory is expected to increase slowly over the next few years but will be based on mortgage rates. That said, if rates begin to come down, the market will become more of a buyer’s market over the next five years.