It’s been a rough time for people who want to buy a home. Prices have risen, mortgage rates have surged, and many people have been priced out of home ownership. As a result, it’s also been a challenging time for moving companies that depend on home sales for business. At this point, many people are wondering what happens next. Will the housing market improve, crash, or stay the same? While we don’t have a crystal ball, we do have three expert perspectives on housing market predictions.
One: An Optimistic Approach
If you’re an optimist, you may assume that the housing market will improve soon. That’s the take that Lawerence Yun, NAR Chief Economist, is taking. Although home sales have reached a 30-year low, the U.S. population is experiencing long-term growth, and that means that demand for housing is also growing. People may also turn to real estate as a safe investment amid high inflation.
NAR has been trying to encourage home sale growth by advocating for new measures, such as increasing the capital gains exception on the sale of a primary residence.
Yun predicts that over the next decade, eight years will likely see increases in home sales. If that’s true, it’s good news for moving companies that are hoping to see an increase in moving volume.
Two: A Cautious Outlook
It’s commonly accepted that what goes up must come down, but does this hold true for the housing market? Housing prices have risen sharply in recent years, and a reversal of this could lead to a housing market crash.
However, there’s reason to believe that this extreme scenario won’t take place.
According to Bankrate, Dave Liniger, founder of RE/MAX, says that another boom-and-bust cycle will take shape when interest rates finally cool. This does not necessarily entail a major crash. Most housing economists and analysts agree that price drops and market corrections will be modest, and the housing market will not crash because there is simply too much demand for housing.
Also, any price drops may not happen immediately. According to Business Insider, housing market forecasters expect prices to keep rising through 2024. That’s bad news for buyers, and that’s bad new for moving companies who are rooting for home buyers.
Three: A Dire Forecast
Although most experts are predicting housing market improvement and modest market corrections, some people are anticipating a more severe outcome.
According to the Daily Mail, Chris Vermeulen, a veteran strategist with The Technical Traders, warns that the real estate market could be headed for a significant correction. He cites the fact that building numbers for homes have plateaued after a sharp decline, something that occurred before the 2008 housing crisis.
So Which Is It?
Again, we don’t have a crystal ball, so we can’t predict the future with any certainty. Most experts seem to agree that high prices will continue for a while before declining in a moderate market correction, and that high levels of demand are good news for the long-term strength of the housing market.
When Will Interest Rates Go Down?
High interest rates have made it more expensive to buy a home, and that’s hurt home sales. As a result, any predictions about the housing market need to include predictions about interest rates.
Forbes says interest rates reached a high of 7.22% in early May before going up and down thought the rest of May and through early July. Freddie Mac says rates will remain elevate through most of 2024, and other forecasts put rates at between 6.25% and 7.5%.
The Takeaway for Moving Companies
The housing market, like all markets, goes in cycles. Some cycles are more severe than others, leading to balloons and crashes, but good and bad times are both always temporary.
For moving companies that need to maintain a steady source of revenue, this is a challenge. If your company can survive the lean times, you won’t have a company left to thrive when times are good.
So what can moving companies do?
Even when moves are down, some people will still be moving. Moving companies need to find ways to make the most out of that segment.
- Provide quality service. Word-of-mouth advertising and referrals can go a long way during hard times.
- Find other sources of revenue. If you can increase your revenue streams, you can boost your profits even when moving volume is down.
Offering moving insurance can help on both accounts. Moving insurance protects customers, and that can lead to better experiences. Moving companies can also earn revenue by selling moving insurance to companies. See how much you could earn.