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At the last Federal Reserve board meeting, they voted to maintain rates as expected. Whether the Fed will vote for a rate cut at their next meeting remains to be seen. There has been signs of economic growth, a stabilizing unemployment rate and inflation which remains elevated around 2.7%, above their target 2%, all of which are factors against lowering rates. The next Fed meeting will take place March 17-18, 2026. Currently, most experts like the National Association of Realtors, Zillow, Fannie Mae, Mortgage Bankers Association and Redfin expect rates to hover around the 6% mark, or just slightly below, for the time being. It is expected however that even a slight decrease in rate will continue driving up demand.
Recently, Fannie Mae and Pulsenomics released their Home Price Expectations Survey which asks the top 150 economists in the U.S. what their thoughts are on home price appreciation. While their median forecast for 2026 is 2.15% nationally, over the next five years, they expect a 15% increase! This is quite meaningful for wealth creation. If someone purchases a $1mil home, they would gain $150,000 in appreciation in just five years. Remember also that these are nationwide averages. Because there is still very short supply overall in West Los Angeles, we are likely to see greater than the 2.15% and 15% increases.
The moral of the story is to get into the market now, before everyone else decides they are going to do the same; whether it is to purchase your first home, second home or upgrade or downsize. Now is the time to act, before we have another run on our already short housing supply.
