If you’re thinking of listing your current home and searching for your dream home, you’re surely tracking the market closely and wondering when you should make the leap. Should you sell your house quickly and buy a new home, or does waiting six months or a year for the market to simmer down make more sense? Let’s take a look at what’s been happening with home prices and whether experts say you should buy now or wait.
Are home prices continuing to rise?
When talking about real estate prices, it’s important to understand that deceleration is not the same as depreciation. Acceleration means prices rise at a greater year-over-year pace than the previous month; deceleration means home values continue to rise but at a slower pace of year-over-year appreciation; and depreciation means prices drop below current values. No one is forecasting depreciation.
What’s more likely, then—acceleration or deceleration?
Many analysts projected home price appreciation would slow dramatically in the fall of 2021 and then continue to soften throughout 2022. So far, that hasn’t happened. The major price indices are all revealing ongoing double-digit price appreciation. Here’s a look at their reports on year-over-year price appreciation for December 2021:
This graph shows the continued acceleration of home prices on all three indices for each month of 2021:
As the graph above reveals, home prices appreciated dramatically from last January to last July according to all three indices. In August, prices appreciated less dramatically. Many thought that would be the beginning of a deceleration, but that wasn’t the case. Instead, appreciation began to level off for a few months before two of the three indices saw appreciation re-accelerate again in December. We are still solidly in acceleration, not deceleration (and most definitely not depreciation).
As Selma Hepp, Deputy Chief Economist at CoreLogic, explains, “after some signs of slowing home price growth… monthly price growth re-accelerated again, indicating home buyers have not yet thrown in the towel.”
What does this mean for you?
If you’re someone looking to sell your current house and buy a home that better fits your needs, waiting will cost you in two ways:
- Mortgage rates are forecast to rise this year.
- Home prices should continue to appreciate at double-digit levels for some time.
If you wait, rising mortgage rates and high home price appreciation will have a dramatic impact on your purchasing power and your monthly mortgage payment.
Maybe the best thing to do is listen to the advice of Len Kiefer, Deputy Chief Economist at Freddie Mac: “If you’re thinking about waiting until next year and that maybe rates are higher, but you’ll get a deal on prices—well that’s risky. It may be more advantageous to purchase this year relative to waiting until 2023 at this time.”
If this discussion makes you want to sell your house quickly and get into your next home, we’d love to help you out at MarketPro Homebuyers.
Work with MarketPro:
When you work with us, we’ll give you a fast cash offer for your current home just as it is now; no repairs, no inspection, no commissions or fees. Our team will walk you through your quote, including a review of what your home would likely bring on the open market. Through our stress-free process, you can sell your house quickly and get into your dream home right away!
If you’re in Washington, D.C., Maryland, Virginia, or Pennsylvania, we’d love to show you how easy the sales process can be. Contact us today for a no-pressure quote.