Inflation is cooling after consecutive months of steep interest rate hikes, and while experts predict a more affordable market by year-end, they also expect a more competitive homebuying landscape that will predominantly affect first-time buyers. Mortgage rates could near the 5% range by the final quarter of 2023 or the start of 2024, and more affordable borrowing costs will likely boost housing demand.
In response, more homebuyers will return to the for-sale market only to find a lack of available listings. That could result in heated bidding wars and homes selling for well above their asking prices, Forbes reports.
Assuming inflation wanes, and the economy remains in good shape. Mortgage rates could decrease from 7% to around 5% in 2024. In that scenario, many prospective homebuyers will return to the market. But unfortunately, that won’t be enough to motivate most homeowners to sell. A homeowner who is looking to move into a home that is the same price or more expensive than their current home will have to spend hundreds of dollars more per month on a mortgage and pay up to 6% of their home’s value in real estate fees.
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