Weekly Housing Market Headlines September 29th, 2023
Let's take a look at the weekly housing market and economic headlines. It’s important to know about this stuff, even if it seems a little complicated. It can help us make smart choices for the future!
Will Rates Go Higher?
While the central bank left the benchmark rate unchanged in the target range of 5.25%-5.5% this week, Fannie Mae Chief Economist Doug Duncan believes that mortgage rates will stay elevated before the Fed makes further rate cuts.
“We’ve always been in the camp that we believe Fed Chair Jerome Powell when he says higher for longer,” Duncan said in an interview with HousingWire this week.
With the majority of Fed officials expecting another rate hike by year-end, Duncan predicts a 50/50 chance of that happening
Economy Slowing Down
When the cost to borrow money stays the same, people might not spend as much. This can make the economy (all the money stuff happening in the country) slow down. It’s like taking your foot off the gas pedal in a car. An unchanged benchmark rate can sometimes lead to a cautious approach to spending, thereby slowing economic growth. It’s akin to a car slowing down as it eases off the gas pedal, maneuvering gently through the financial pathways.
Waiting for Lower Rates
While the central bank left the benchmark rate unchanged in the target range of 5.25%-5.5% this week, Fannie Mae Chief Economist Doug Duncan believes that mortgage rates will stay elevated before the Fed makes further rate cuts.
“We’ve always been in the camp that we believe Fed Chair Jerome Powell when he says higher for longer,” Duncan said in an interview with HousingWire this week.
"Waiting could hurt you by missing out on accumulating equity over the next year."
What People Think About Buying Homes
Turning our attention to the housing sector, the latest National Housing Survey® uncovers notable trends. Despite individuals' confidence in their employment stability, there's a palpable hesitation regarding the broader economy and the timing for purchasing homes. The consensus indicates a general reluctance toward deeming it an opportune moment for home buying. BUT places like San Francisco, which is up 6%, are seeing every 6 homes being sold, 4 of them are by investors.
What does this mean for you- if you are buying expect competition from investors in high demand areas like San Diego where investors can make money from Airbnb’s and long term rentals.
Inventory Ticks Up
For the first time in 6 years Inventory has ticked up - this could mean a start to home sellers accepting the current market and rates and moving forward with their plans to move that have been put to the side over the last year.
But despite this uptick in homes for sale, we are still down ½ of the normal homes for sale pre-pandemic. This will leave buyers still competing for homes when buying…but can help build equity for those home buyers who can afford to buy now. This is where it’s important to plan out your long term goals for your future with a professional realtor. Finally, home builders are building more multi units such as apartments and condos that will be available for rent versus purchase. This will help stabilize rents and may even bring them down from their highs.
Implications for You
This situation may naturally evoke curiosity or concern. Recognize the importance of comprehending these financial landscapes as they play a crucial role in informed decision-making, especially regarding substantial investments like home buying.
In these times of uncertainty, continue to prioritize knowledge acquisition and informed inquiry. These tools serve as your compass, directing your financial and investment decisions towards a secure and prosperous future.
Understanding the housing market is like having a map that guides you to make smart choices for a happy future. Buying and selling in todays market is more tricky than it used to be. Let’s talk about your long term goals- Book a Call With Me
Keep asking questions and stay awesome!
Take care,
Tristen
