But one potential buyer, Thomas Malone, is going ahead with his home search anyway, even though he has no expectation that things will get better anytime soon. Malone is an economist for real estate data company CoreLogic, where he analyzes housing trends. He believes home prices are in for a long haul of either slow declines or stagnation, but doesn’t see a price crash on the horizon. Call it a “stall” rather than the crash some buyers have been hoping for. That’s bad news for buyers trying to wait out the current poor market conditions. “We know the general direction of the market and we can paint it in broad strokes,” Malone said. “But trying to time it? It’s a lot of luck.” To be sure, forecasts for the path of home prices vary. Pantheon Macroeconomics, for example, is predicting a crash of 20% or more. But while the future path of the housing market is uncertain, there’s little doubt that things are pretty bad for homebuyers at the moment. First, mortgage rates have spiked in recent months, and a decline over the past few weeks hasn’t reversed all the damage. The average rate offered for a 30-year fixed-rate mortgage was 6.49% last week, nearly double compared to where it was at the start of the year, according to Freddie Mac. While the central bank does not set interest rates, its actions do influence the bond market, and mortgage rates tend to move in the same direction as 10-year Treasurys. Those generally go up when investors grow more nervous about inflation and the Fed responds to keep rising prices under check. Prices are still soaring, too. While home prices have fallen slightly over the past three months, they’re unwinding a massive pandemic-era runup. As of October, average home prices were still 41% higher than they were in February 2020, data from the S&P CoreLogic Case-Shiller Home Price Index shows. Those two factors have combined to make mortgage payments balloon. As of October, the typical mortgage payment for a newly bought home (not including things such as insurance and taxes) was $2,012, up $629 from the beginning of the year, data from the Mortgage Bankers Association showed. The big question for homebuyers: Is it better to wait for things to improve, or wade in and hope for the best?Some buyers may be hoping for the situation to improve. But diving in now might make more sense than it first appears. For one thing, while prices may still be high, there isn’t the frenzy of competition that brewed during the pandemic when interest rates were at rock bottom. During that time, buyers lined up around the block for open houses, waived inspections and wrote personalized letters for the chance to buy houses. And the high mortgage rates, while daunting, may not be a deal-breaker depending on your financial situation. Homebuyers can refinance to a lower mortgage rate at some point in the future if rates go back down again, as they always have in the past after rate spikes. Additionally, that long-anticipated price crash may not be coming. There are forces working against it. The main one, Malone said, is a unique advantage that U.S. homeowners enjoy in the 30-year fixed-rate mortgage. Homeowners who locked in mortgage rates when they were cheap would be abandoning those low monthly payments if they sold their homes; the typical monthly payment on a newly bought home was over $1,300 more than the same house bought 10 years before, as of September. In other words, longtime homeowners have every reason to stay put. “The people in these homes are in a situation where they are likely going to be making themselves worse off financially by moving, so…it’s a real disincentive to sell your home,” Malone said. Because of this, while demand for homes has fallen off due to many buyers being priced out of the market, the supply of housing has not increased in a way that would make prices plunge dramatically. There were about 1.22 million homes for sale in October, well below the 1.39 million typically on the market in 2019, according to data from National Association of Realtors projections. If those conditions persist, the housing market could stay dead in the water for the foreseeable future. “If home shoppers and sellers have unrealistic expectations, they could find themselves in a stalemate in the year ahead,” economists at Realtor.com said last week in an annual housing forecast. “The 2023 housing market could become a ‘nobody’s market,’ not friendly to buyers nor to sellers.” Whether the market thaws out largely depends on what happens with the Fed’s war on inflation and the path of interest rate hikes, Malone said, and no one can be sure how that will play out in the year ahead. “We’re really in uncharted territory historically and it’s unclear exactly what to expect,” he said.Have a question, comment, or story to share? You can reach Diccon at dhyatt@thebalance.com.