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Are home prices going to drop this year? 

On Behalf of | May 16, 2024 | Real Estate Disputes

If you’re interested in purchasing residential real estate, you likely see it in two ways. First, you’re buying a home because you simply need somewhere to live. Second, you’re investing in the property because you think the value will go up moving forward.

At the same time, though, you have likely noticed that home prices have risen dramatically over the last decade. If you buy a house now, are those prices just going to drop in the coming year? What are experts predicting about the future of the market?

Prices may keep going up

Rather than going down, prices may actually go up over the next year, simply continuing this trend.

The reason is a lack of supply. There are more potential buyers – especially with corporations buying homes, as well as homeowners – than there are sellers. Many people are staying in their homes longer. They feel like it would be unaffordable for them to move, so they aren’t selling. As long as the relative supply stays low and the demand stays high, home prices will also stay high.

Interest rates do play a role here, and there is speculation that they could drop in the future. If they do, this can make homes more affordable. But that may not necessarily reduce the price of those homes. It may just increase the demand as more people seek to buy homes with these affordable interest rates. The increase in demand could push the overall prices of those houses back up.

Real estate can be very complex. It’s important to know how interest rates are changing and how the market is moving. Potential buyers also need to know about the legal steps they should take during a transaction.