As you may have heard, interest rates have come down quite a bit. According to Freddiemac.com, mortgage rates have come down about 1.125% since October 26, 2023 even though the Federal Reserve Board hasn’t changed their rates at all. This is mainly because the entities that lend the money (mortgage bankers) were poised for more increases and since it looks like the Federal Reserve will not be raising interest rates any time soon (and possibly lowering rates) the mortgage companies have slowly been lowering their rates.
This news is good for both buyers and sellers. For buyer’s, lower interest rates typically mean lower monthly payments and more affordability. For home sellers, we’re still in a housing shortage and the housing inventory is still below average, creating a ‘Sellers’ Market’ per se. There will likely be more buyer’s in the marketplace this year than last year creating (yet again) multiple offers on well-maintained homes.
When Will the Feds Lower Rates?
That will be the question for the rest of the year. The economy is still strong, unemployment is minimal and we’re still in a housing shortage. In my opinion, Federal Reserve Chairman Jerome Powell, will not lower rates until we get closer to election time… if at all. If he (Jerome Powell) raises rates too soon, he may cause higher inflation and THAT is the #1 thing he was trying to defeat by constantly RAISING interest rates over the last year. Nobody knows for sure. I think he should leave the rates where they are and take a longer ‘wait and see’ approach. Yes, I’m a realtor, and I like helping people buy and sell houses. If the interest rates are too high, home sales slow. If the interest rates are too low, home prices go through the roof. The question is …. What is the ‘Goldilocks’ interest rate? Not too high, not too low… just right!
Fun Facts: 1. January is known for New Year’s Day, symbolizing fresh starts and resolutions and a time for reflection. 2. January is typically the coldest month of the year. 3. The first Full Moon of 2024 will be on January 25th.
If you have any questions on this or any other real estate related matter feel free to call, text or email me, I’m here for you.
