The real estate market is in a constant state of shifts and changes. Some of them are bigger or more impactful than others, but the truth remains the same: from pandemics to recessions to elections, we can never predict what’s going to happen.

You do, however, have control over how you react to what’s happening. Because no matter what is going on in the world, one thing will forever remain the same: people will always need a place to call home.

Before you hit the panic button, you need to cut through the noise and get answers to your real estate questions. The biggest questions to ask right now are...

WHAT’S HAPPENING WITH MORTGAGE RATES?

Rising mortgage rates are no doubt one of the biggest factors impacting the housing market right now.

It’s important to remember that the low rates of the last few years were an anomaly.

As inflation rises and mortgage rates climb, some may have less purchasing power and their dream of homeownership may change.

However, it’s important to remember one big piece of economic wisdom: there is no better hedge against inflation than homeownership.

Historically, we have seen homeownership outperform inflation in most decades. So if there's an asset to invest in, housing is one of the few tangible assets that tend to hold their value.

WHAT WILL HAPPEN TO REAL ESTATE IF WE GO INTO A RECESSION?

Historical context is everything. In 4 out of the last 6 recessions, home prices continued to appreciate. So if a recession happens, it does not necessarily mean home prices will decline. This is an important piece of information to consider.

The other big takeaway if a recession happens: interest rates usually go up at the beginning of an economic decline, but in order to stimulate the economy, they will typically fall.

According to Fortune, "Over the past five recessions, mortgage rates have fallen an average of 1.8 percentage points from the peak seen during the recession to the trough. In many cases, rates continued to fall after the fact as it takes some time to turn things around even when the recession is technically over."

So, while the days of mortgage rates below 3% may be over, we also can't say for sure they're only going to go up from here. Understanding this is crucial to comprehending what to anticipate during today's shifting market.

WHAT'S GOING TO HAPPEN THIS YEAR IN REAL ESTATE?

When we’re constantly being bombarded with different opinions and information, it’s easy to get lost in the noise.

So while signs of a market shift become clearer each day, it’s important to remember that context is everything.

Yes, we are seeing a slowdown. However, we are really just heading back toward the market pace we saw pre-pandemic, and those were still great years for real estate.

Focus on the big picture, and that’s this: the housing market is still very strong, and previous projections are already outperforming what industry experts forecasted earlier this year.

For example, all major real estate institutions are forecasting at least 6 million homes sold in 2022.

Instead of getting caught up in headlines that do more to terrify than clarify what’s really happening in real estate, cut through the noise and focus your business on what carries the most weight: expert-backed data and insights.

SHOULD I BUY A HOME RIGHT NOW?

This is probably one of the biggest questions buyers have right now.

For all the reasons mentioned above, the short answer to this question is yes.

Trying to time the housing market for that deal of a lifetime is like trying to win the lottery. And while purchasing a home today may not be as easy as it was a couple of years ago, the latest data shows that inventory levels are rising, which means more moderate price appreciation and more options for buyers.

This is the time to consider those insights and take another look if you have put your home search on pause. 

BOTTOM LINE

We can’t control what’s going to happen with mortgage rates or price appreciation, but we can control what we prioritize. That way, in times of uncertainty, you see these factors less as stop signs and more as opportunities for growth and change. The key to success in any market is staying educated, acclimating to the current climate and making sure you’re priorities are in order.

My priority is to help buyers and sellers make the right decisions. If you are looking to buy or sell a home let’s talk about your priorities and how you can be successful in the current market.

Call or text me - LaFreta White 325-656-6896 with ERA Newiln & Company.

Want to know what is going on in or around San Angelo? Check out my Key Events. I hope to see you there.