Many people don’t know this, but Federal Reserve Chairman Jerome Powell is my mortal enemy. He is the Scrooge to my Tiny Tim, the Grinch to my Cindy Lou Who, the Mr. Potter to my George Bailey (ok, I’m getting too deep into the holiday references). The Fed’s constant increase in interest rates have placed a burden on the housing market and the economy in general. Anyone who has considered buying a home will tell you but the rates are so high as a reason for their hesitation.
The Good News
Thankfully, the Federal Reserve, after 11 hikes that have raised the federal funds rate to its highest level in over 22 years, have now kept rates steady for the 3rd straight time. Even better, committee members plan at least 3 rate cuts in 2024. Why are they finally doing this? Inflation has come off its highs – upping rates is done to curb inflation. Even better, the unemployment rate hasn’t suffered significantly in the process. According to the latest Bureau of Labor Statistics data, it is hovering at 3.7%.
What This Means for Real Estate
Anticipate mortgage rates to continue to drop down the chimney. They just slipped below 7%! This will get many buyers off the sideline, though be warned… this sharp uptick in demand will push home values north, and only the rate can be refinanced, not the price.
Don’t wait too long to purchase, or you will miss out on significant home appreciation. If finding your (first) home seems like an abominable undertaking, ask for Saint Nicholas* (yours truly). We can work together to make it a wonderful experience.
*Licensed for real estate, not for going down chimneys. If we see any homes together, we will have to go through the front door.