The housing market goes as mortgage rates go. Want to predict the next month or so in real estate? Well, look at the source of where most buyers receiving funding for purchasing a new home.
Taking you back to October of last year where I wrote about the struggle the next few months will be. Mortgage rates peaking at 7.24% for the 30 yr fixed. Pending home sales lowest they’ve been since 2010. During the months of October, November, and December I had 5 active listings and it was very quiet. Frustrating for my sellers as most buyers sat on the sidelines waiting to see what will happen next.
What’s happened over the past week? Showings!!! The market is picking back up in part because of seasonality. But mostly because mortgage rates are dropping!!! As I write this, mortgage rates are at 6.07% lowest they’ve been since September of last year. Some more good news, the CPI report was just released yesterday and the index fell .01% in December. Meeting expectations, for the biggest drop since April 2020.
The next shoe to drop is the Fed meeting on February 1st. Many experts originally predicted a hike of half a basis point. Now, with the new CPI data they are expecting a quarter percent. This could mean… and here’s my prediction.
Rates fall into the 5’s after the Fed meeting on February 1st. If that happens, buyers will come back out in waves and the market will pick back up again. If you’re sitting on the fence, now is the time to get out there and start searching. Our team would love to sit down and meet with you to better understand your goals and needs. The best way to start is by finding out what you can afford using this affordability calculator.
Thanks for reading,
Chris
