The Expert Podcast

• Home prices: Will they rise or fall? Here’s one prediction from high-level finance experts: Home prices could fall by another 10% due to sustained high interest rates.
• Interest rates: Likely to remain high, hovering between 6-8%. Historically, these rates are typical for real estate transactions, with rates in the 80s reaching over 10%, and the 2000s seeing rates in the 3-5% range.
• Effect of interest rates on affordability: Even with a 10% decrease in home prices, the mortgage payment difference might only be a couple hundred bucks, not enough to dramatically change affordability.
• Housing affordability: If the price of a home drops from $480,000 to $440,000, your monthly mortgage payment would only decrease by around $300, which isn’t a huge relief for buyers. If this small difference makes or breaks your ability to buy, consider lowering your home purchase expectations.
• The impact of interest rate changes: A mortgage rate increase from 3% to 8% could add $1,000 to your monthly payment, far outweighing the minor savings from a 10% drop in home prices.
• Market predictions: While home prices might decrease by 10% over the year, this isn’t a housing market crash but rather a correction to more balanced conditions between buyers and sellers.
• The buyer-seller dynamic: In order for prices to drop, both the buyer and seller must agree. Sellers need to make concessions, but they won’t drastically lower prices unless absolutely necessary.
• Plan accordingly: Find a house within your budget that you can afford with current interest rates (8-9%) rather than waiting for a small decrease in prices.
• Renting vs. buying: Renting for another year might cost you more in the long run. For example, paying $2,500 a month in rent for a year totals $30,000, which could be more than the potential savings from a 10% drop in home prices. Consider buying now if you’re a renter, as waiting for price reductions could result in a break-even situation.