Link: https://www.realtor.com/news/trends/how-high-will-mortgage-rates-go/
If you’ve been keeping an eye on the real estate market, you might have heard the recent buzz about the U.S. Federal Reserve’s plans. At the beginning of the year, the thought was the Fed would drop the rates throughout the year. Now, it seems like the hope is for the rates to hold steady. But what does that mean for you, especially if you’re in the market for a new home or looking to sell?
First things first, let’s talk about mortgage rates. According to this article by Clare Trapasso, the Fed’s decision to maintain interest rates is likely to cause mortgage rates to rise again. Now, that might sound a bit daunting, but fear not! We’re here to help you understand what this means for your homebuying or selling journey.
Realtor.com® Chief Economist Danielle Hale predicts that mortgage rates could edge back up to 8% as a result of the Fed’s decision. But here’s the thing – mortgage rates don’t operate in a vacuum. They often follow the same trajectory as the Fed’s interest rates. So, when the Fed decides to tweak its rates, mortgage rates tend to follow suit. The main concern is that there is not enough confidence that inflation is moving on a strong downward trend.
The path mortgage rates follow will depend on how inflation plays out in the coming months. If inflation starts to ease, mortgage rates could begin to decline again. However, if inflation worsens, we might indeed see mortgage rates hitting that 8% mark.
Just a few months ago, they had fallen to an average of 6.62%. But with the Fed signaling fewer rate cuts, mortgage rates have climbed back up, averaging around 7.5% recently. This upward trend reflects the market’s response to the Fed’s stance on interest rates.
So, what does all of this mean for you as a buyer or seller? Well, it’s essential to stay informed and proactive. If you’re planning to buy a home, you might want to act sooner rather than later to lock in a favorable mortgage rate. On the other hand, if you’re selling, understanding market trends can help you price your home competitively.
If you plan on waiting for prices to drop, recognize the lack of supply and the strong buyer demand. Home prices, like mortgage rates, are also climbing. The median list price reached $424,900 in March, according to the latest Realtor.com data. So, it’s safe to say that navigating the spring housing market might require a bit of extra savvy this year.
While the Fed’s decision to hold interest rates steady may lead to higher mortgage rates, it’s not necessarily cause for alarm. By staying informed, working with a knowledgeable real estate agent, like the Kat Nat Team, and keeping an eye on market trends, you can still achieve your homeownership goals. Remember, we’re here to help you every step of the way!