06/14/2024
From our friend, Dan Harding, at Intercap Lending: I wanted to discuss home appreciation… attached is a screenshot of a Fannie Mae home price expectations survey of the top 150 economists in the country, showing what they are forecasting through 2028. Cumulatively, they are projecting 20.8% appreciation over this 5-year period.
I know there is a decent contingency of folks who are in disbelief, who had decided to not buy a home years ago because they felt home prices were too high then. And are exasperated by the market now, even in the face of higher interest rates.
They are really discouraged. They want to see prices crash. They want to be right. And they try to make comparisons to the great recession and what prices did then, even though their logic is flawed. And they tell everyone about it, that the crash is just around the corner. And I feel bad for the folks who are scared away from otherwise considering buying a home now.
Why haven’t home prices dropped in the face of 7-8% rates? It’s simply the supply demand equilibrium. And keep in mind about 30% transactions are cash, so they don’t care what rates are doing. Savvy buyers who understand the market are still out there looking for homes. Buyers who understand the wealth creation of leveraging 5% the price to capture 100% of the home appreciation are still in the market.
Keep up the good fight. The negativity about the housing market is everywhere. Here’s to your clients being able to push through the noise, listen to your expert advice, and consider making the move that will impact their quality of life more than any other decision.
Rates are 0.25% lower than last week. Let me know if I can do anything for you. I’m available throughout the weekend.
Dan Harding
Intercap Lending