BiggerPockets Daily
Will Mortgage Rates Improve? Spring Housing Market Outlook & Predictions
Feb 19, 2025
The spring housing market is at a pivotal point with hopes for a rebound after two slow years. Fluctuating mortgage rates are influencing buyer sentiment and market stability. Real estate experts discuss potential shifts as buyers face affordability challenges. There’s a focus on creative investment strategies, including ways to defer capital gains taxes. With declining prices, a buyer's market is emerging, presenting opportunities for savvy investors. Insights on what to watch in the coming weeks are a must for anyone interested in real estate.
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Quick takeaways
- Elevated mortgage rates are impacting housing supply, causing a lock-in effect among current homeowners who hesitate to sell.
- A shift in buyer sentiment suggests more activity in the market, yet affordability concerns continue to keep many potential buyers on the sidelines.
Deep dives
Current State of the Housing Market
The housing market is currently experiencing significant challenges, with home sales hitting their lowest levels since the mid-1990s. Mortgage rates have remained elevated, averaging just under 7%, in stark contrast to the historical lows of under 3% seen during the pandemic. This sustained high interest rate environment has led to a lock-in effect, where homeowners with low-rate mortgages are reluctant to sell and move, thus constricting supply in the market. As affordability continues to be a primary concern for potential buyers, many are adopting a wait-and-see approach, hoping for a decline in rates before making a purchase.
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