U.S. housing market shows signs of gradual improvement

As the year progresses, the housing market is expected to see mortgage rates remain above 6%, with home prices likely climbing moderately. This situation may seem discouraging for potential buyers. However, economists suggest that if you're ready to buy, it's better to proceed rather than wait for ideal conditions. Many homeowners who secured low mortgage rates in previous years are staying put, which limits the number of homes for sale. Future housing market trends will also depend on policy changes from the current presidential administration. Senior economist Joel Berner advises that finding a home that fits your budget and needs is key. Some buyers are driven to purchase due to life changes, such as new jobs or family needs. For example, Nhu Vien Nguyen and her fiancé have found a condominium in Cambridge, saving on monthly expenses compared to their prior rent. Even with a higher mortgage rate, they see moving as a financial improvement. The housing market is affected by supply and demand. When there are few homes available, prices generally increase. Currently, many buyers are hesitant to enter the market due to high mortgage rates. As more homeowners remain in their homes longer, this trend further constrains inventory, potentially driving prices even higher. Despite these challenges, there are positive signs. A recent report showed a surge in newly listed homes, indicating that some sellers are becoming more active. Experts predict that an increase in available homes could lead to a more balanced market, where buyers and sellers have equal opportunities. Mortgage rates are a significant factor, and while fluctuations are expected, rates may average around 6.5% by the end of the year. Buyers are encouraged to lock in rates they find acceptable, as experts believe rates won't drop to previously low levels. For those considering buying a home, a substantial down payment can help manage costs. Many current homeowners have significant equity in their properties, which can assist in financing their next home. Prospective buyers should compare mortgage offers to find the best deal. When deciding to enter the housing market, buyers should only move forward when the time feels right for them. It’s crucial to budget properly and get pre-approved for a mortgage to know affordability. Additionally, understanding potential climate risks associated with properties is important. For home sellers, if relocation is necessary due to job or family changes, it's wise to sell. However, for those with more flexible situations, staying put may be a better financial decision. Homeowners should assess their property’s value and costs related to selling before making a decision. New home construction is also an option for buyers. Builders may offer incentives to make new homes more attractive. However, rising costs for materials could affect pricing, so locking in deals sooner may be beneficial.