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Mortgage rates remain the biggest driver of today’s housing market — and expectations have shifted.

Earlier forecasts suggested rates might average around 6 percent this year. Now, projections are closer to 6.5 percent, with the potential to reach 7 percent if energy prices stay elevated. Global events, particularly rising oil prices, are playing a major role in keeping rates higher.

Even so, Lawrence Yun, chief economist of the National Association of Realtors, does not expect a return to the extreme mortgage rates of past decades. Today’s economy is more energy efficient, which helps prevent the kind of spikes seen in the 1970s.

Meanwhile, the Federal Open Market Committee is under pressure to act. With possible leadership changes at the Federal Reserve, there is growing speculation that interest rate cuts could happen later this year. Yun suggests a potential 50-basis-point cut this summer, though timing will depend heavily on inflation trends.

So what does this mean for the housing market?

Home sales started the year slower than expected, leading to a revised forecast of about 4 percent growth instead of the originally projected 14 percent. Still, demand hasn’t disappeared—it’s just more sensitive to rates and economic uncertainty.

The bottom line: this is a market driven by timing, but not in the way many think. Trying to predict the perfect moment may not be as important as being prepared when the right opportunity appears.
In today’s environment, readiness — not perfection — is what wins.