So which is it? Will housing take off or fall flat in fear of Fed rate hikes?
Real estate experts have all sorts of predictions for 2004. The National Association of Realtors (NAR) projects that existing-home sales will reach a record high of 6.17 million from 6.1 million last year, while new-home sales will remain stable at 1.08 million. Freddie Mac (NYSE: FRE ) has even higher hopes -- 7.3 million existing-home sales and 1.85 million new houses.
When you ask potential homebuyers about their plans, they're a little more wary. A recent survey by Ipsos-Insight found that 12% of 1,001 survey respondents plan to purchase a home in 2004, a slight drop from last year's record high.
Let's take a look at what they'll get. According to the NAR, the median existing-home price will be $179,200 (a 5.4% increase from 2004), while the median new-home price is expected to reach $210,400 (up 7.9%). Shoppers will most likely face a 6.9%, 30-year fixed-rate mortgage by the end of this year. Here's what rates are right now.
Even if you're not in the market for a new home this year, you should be keeping an eye on rates. Refinancing can save you a bundle in the long and short term: You can lock in a lower interest rate, or convert a 30-year mortgage to a 15-year one and slash the amount you pay out in interest over the years. If you want a good deal, the clock's ticking. Here's more on the ins and outs of refinancing.