When the going gets tough and the market starts shifting, buyers and sellers tend to have one response: either to fight or take a flight.

But 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, we can never predict what's going to happen.

You do, however, have control over how you manage this change 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.

So, before you hit the panic button, you need to cut through the noise and get answers to the biggest questions in real estate right now.

Will Mortgage Rates Keep Rising?

One of the biggest factors of the housing market cooldown we're seeing is the swift rise in mortgage rates. And as that volatility continues, many people are asking "are mortgage rates going to keep rising?" 

To find the answer to this question, you have to first understand the "Why" behind the reason mortgage rates have doubled since the beginning of the year and that is due to "Inflation".

In an effort to ease inflation, the BOC is taking steps to try to tame inflation by slowing the economy, and those decisions are having an impact on mortgage rates. And until that's under control, we may continue to see them stay high or rise even higher. So if you're thinking of waiting for mortgage rates to drop...it may be a while.

However, despite the challenges rising rates bring, there is still opportunity in the market, especially as we move into the fall and winter months.

"There is no doubt that the increasing mortgage rate will make homebuying even more challenging,...buyers may still find opportunities, as these changes coincide with the time of the year when buyers have historically found the best market conditions to obtain more bargaining power," said Jiayi Xiu, economist for realtor.com.

What's Going To Happen With Home Prices?

After years of record-breaking price appreciation in the country, we've been seeing a very different scenario play out in the last few months.

In order to truly understand why this is happening, this quote from Dave Ramsey explains it all:

"The root issue is what drives house prices almost always is supply and demand."

And when you take a look at the graph below, you'll see why we have seen such a large slowdown in home appreciation in the last few months.

 We're at an inflection point. The swift rise in mortgage rates and lingering inflation has changed the playing field in the housing market. So, as the pace of sales slows, the more active listings there are. But that doesn't necessarily mean we're going to see national depreciation in home values.

Overall, experts are projecting continued price appreciation in most markets, averaging about 1.8% in 2023. However, there are some overheated areas where experts are projecting slight depreciation, but certainly not enough to call it a crash.

Remember, headlines do more to terrify than clarify. So, it's always important to make sure that you're on top of the latest housing insights from the most trusted and credible sources and partner with a real estate professional that can help you decipher it.

Should I Buy A Home Right Now?

So, with all the uncertainty surrounding mortgage rates and home prices, the ultimate question comes down to this: should you buy a home right now?

Despite the volatility we're seeing in today's housing market, it's important to remember the various financial and non-financial benefits of homeownership.

Yes, affordability is a challenge right now. It's true that it costs more to buy a home today than it did last year, but the same is also true for renting. This means, either way, you're going to be paying more. The difference is, with homeownership, you're also gaining equity, which will help increase your net worth.

Always remember, "homeownership truly wins over time". It's a long game. You can either put all of your money over time into rent and not get a return, or play the long game, invest in homeownership, and benefit from it in the long run.

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.

source: KCM, ShowingTime, realtor.com

Disclaimer: The above information is from sources believed reliable but should not be relied upon without verification. The publisher assumes no responsibility for its accuracy. You are encouraged to get independent legal advice before commencing any transaction.