Mortgage Rates Down, Home Prices Up

If you're considering buying a home in Harrisonburg, VA, there's exciting news on the horizon. The recent decline in mortgage rates is not only enhancing affordability but also sparking a potential increase in housing inventory. While the positive news is encouraging, be aware that experts are projecting a modest rise in home prices throughout 2024.

Understanding the Mortgage Rate Lock-In Effect

Over the past year, limited housing options were a challenge for potential homebuyers due to homeowners delaying their plans to sell when mortgage rates were on the rise. This created a phenomenon known as the rate lock-in effect, where homeowners opted to stay put to maintain their current lower mortgage rates.

Indications of a Shifting Trend

The latest data from Realtor.com reveals a significant increase in new houses put up for sale in December 2023 compared to the same period in 2022. This uptick, typically uncommon during the year-end slowdown, suggests a potential easing of the rate lock-in effect in response to lower mortgage rates.

Expert Projections on Home Prices in 2024

Despite concerns about a national increase in home prices, a recent survey from Fannie Mae found that 24% of people believe home prices will decline over the next 12 months. However, experts paint a different picture. Forecasts from eight different sources indicate an average expectation of over a 2% increase in home prices by the end of 2024.

Selma Hepp, Chief Economist at CoreLogic, explains that the tight inventory and lower mortgage rates are likely to fuel strong buyer demand, putting upward pressure on prices throughout the year. This aligns with the trends observed in early 2023.

What This Means for Homebuyers

For those considering buying a home, the projected increase in home prices is good news. Homeownership is a valuable investment, and the anticipated appreciation in property values contributes to building equity over time.

Additionally, waiting to make a purchase might result in higher costs later. As experts believe home prices will rise in 2024, acting sooner rather than later could be financially advantageous.

Let's Connect

If you have questions or concerns about the local housing market, mortgage rates, or home prices in Harrisonburg, VA, let's connect. Having a local expert by your side ensures you stay informed and make well-informed decisions as you explore the exciting opportunities unfolding in our area.