With the 2024 Presidential Election now behind us, have consumer attitudes increased or decreased regarding plans to move or purchase a home? Redfin reports, “More than one in five (22%) U.S. residents say they’re more likely to move now that the election is over. Of them, more than a third (36%) are considering moving to another country, and 26% are thinking of moving to a different state. However, 21% of all respondents say they are less likely to move now that the election is over.”
After hitting a two-year low of 6.06% in September, rates rose to near 7% in mid-November but have since modestly declined and seem to be cresting at current levels. What happened to forecasts calling for 6% rates by the end of 2024? Two factors come to mind: better-than-expected economic data and still sticky inflation. A rate of 6% or just below could fuel more positive sentiment towards home buying.
Also, Consumer Confidence in November hit the highest level in a year with the Present Situation Index-consumers’ assessment of current business and labor market conditions – and the Expectations Index – based on consumers’ short-term outlook for income, business, and labor market conditions-both higher. The headlines were bond and rate unfriendly.
On the positive side, the National Association of REALTORS® (NAR) chief economist Lawrence Yun said that mortgage rates may have peaked and within two years the 30-year fixed could fall to a 5.5% – 6% range. However, if the federal deficit continues to balloon, it could put a damper on lower borrowing costs. In addition, the NAR doesn’t expect any big changes in home prices nationally next year, with a 5% change one way or the other. But in five years, he expects prices to have appreciated a total of 15% to 25%.
For a good portion of Americans, home ownership is achieved by hard work and finding the right place to hang your hat and call your own. It’s not an easy task, given higher borrowing costs and low inventories, but it is worth it in the end.
Source: Mortgage Market Guide
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