From Realtor.com:
Experts Predict What the Real Estate Market Will Look Like Once Mortgage Rates Drop
The high mortgage rates that have paralyzed America’s housing market are falling—and could nosedive further by the end of the year.
Rates for a 30-year fixed mortgage plunged to 6.47%—the lowest in over a year—for the week ending Aug. 8, according to Freddie Mac.
And with inflation losing steam and the economy cooling, expectations are high that the Federal Reserve could make not just one, but two rate cuts by the end of this year.
As a result, Realtor.com® senior economist Ralph McLaughlin expects mortgage rates to drop further in September and December, which is “encouraging news for potential homebuyers who have been waiting to participate in the market.”
This is also encouraging news for homeowners who might be thinking of selling. Is it time to finally list their property on the market? And if they do, what should they expect?
…
A recent Realtor.com analysis found that 86% of homeowners have mortgage rates below 6%. Understandably, many feel “locked in,” unwilling to trade in their low rate for today’s higher ones if they sell and buy again.
“Home sellers have been sitting on the sidelines, not wanting to give up their COVID-era interest rates,” says Tan Tunador, vice president and senior loan officer with Atlantic Coast Mortgage.
But once rates drop further, that could change.
“The faster rates drop, the less homeowners will be held in place and we could see both new inventory and more sales,” says Danielle Hale, chief economist of Realtor.com.
“There are a significant number of sellers that couldn’t stomach—right or wrong—going from a 4% rate to a 7.5% rate,” says Mason Whitehead, a Dallas-based branch manager for Churchill Mortgage. “But they can stomach going from 4% to something in the 5% to 6% range.”
Phirrrst
LAX:
The Orlando area is really hell right now. The new property manager we have said the way things are going we can pretty much count out renting during July and August. Just too hot.
We’re flying back to Germany on Thursday. Germany is also very hot but at least I don’t have pay these crazy food prices when I go out to eat. Plus I can get a good local beer.
What is a quarter point rate cut going to really do? Banks are calling for 2 half point rate cuts this year. They want to the return of their leverage…….they don’t care about your monthly mortgage payment.
Juice: The Fed exists only for the stock market and housing market. Bunch of crybabies calling for an emergency rate cut.
“ Couldn’t stomach right or wrong going from 4 to 7.5 percent “ What kind of stupid comment is right or wrong?
Fed Funds Futures traders believe the Fed will cut rates two full percentage points between the Fall and July of next year, bringing rates to the 3.25/3.5 range. Are we to assume this will have no negative impact on inflation?
3B,
The sad truth is, the FED should be raising rates to provide more downside protection. I also read where they were ending quantitative tightening at the first cut. Of course, the economic debt-fed gravy train must roll on, so what better way to do it then to allow everyone to refi their debt at a lower rate, including local and national governments. This is how it’s done. Wash, rinse, repeat.
Lib: That is exactly what I believe, rates should continue to rise, until inflation is killed and prices start to trend lower. But, that won’t happen. Credit card rates and auto rates will start to decline, and like you said it’s back to the races. When it blows up, bail em out. Capitalist system my ass.
The problem is, they want to lower rates to keep prices of real estate/stocks elevated. But that also means inflation must continue. TBH, I’d bet that they could get away with this stupid game if they weren’t so hellbent on stupid energy policy and farming regulations/subsidies.
BRT:They keep asset prices elevated, like houses and rents, that causes anger and frustration in young people. At some point the young people might strike back.
Fast Eddie is at the Jersey Shore.
Fugheddaboutit.
Shore Time is riiiight.
Inflation: New cars are officially out of my range. Mind you, we just paid off the 2018 Outback. 90k miles and that sucker might double that. Wife picked up a sweet Volvo right during lockdown. Amazing deal as that dealer was going out of business. Volvo isn’t nearly as popular out West as it is in the East.
Fed’s Bostic says y’all gonna have a big smile on your faces in the Fall; rate cuts are coming.
My college Sophomore/Junior son just put 4K of the $7K he made this Summer as an RBT into a ROTH IRA and applied and got the student Discover card. Man they grow up fast.
Lib,
Coaching my kid on “What is this 15% discount on buying company stock?”
I may match their paycheck going forward!
That’s a common strategy. Just don’t let them know you are doing it or it could backfire. You can always bail them out, with their own money, as a valuable lesson.