Big Changes Ahead: Fed Rate Cuts Open New Doors in the Housing Market – What It Means for You!
Karlton Uhm
Helping First-Time and Move-Up Homebuyers to Mortgage Success with 25+ Years Experience | Simplifying the Home Loan Process | Committed to Educating & Communicating
National news and local views for the week ending Friday, September 20, 2024
Welcome to this week's real estate update! As we move into fall, there's good news on the horizon for buyers and homeowners alike. With the Federal Reserve easing interest rates and mortgage rates slowly stabilizing, fresh opportunities exist to lock in better deals for home purchases. Whether you're eyeing a new home or keeping a pulse on the market for potential investment, now's a good time to stay informed and make data-driven decisions. Let's dive into what's happening nationally and in our local markets.
National Real Estate News
Fed makes big rate cut!
At its September 18 meeting, the Federal Reserve cut short-term interest rates by 50 basis points (0.5% or half a percent) from 5.5% --> 5.0%. That's an aggressive start to the new easing cycle, which, on Fed member forecasts, could see the Fed Funds Rate drop to 4.4% by end-2024 and 3.4% by end-2025. [Source: Federal Reserve]
Mortgage rates steady
Average 30-yr mortgage rates had already dropped from 7.43% to 6.14% BEFORE the Fed rate decision. That's why the actual Fed rate cut had a limited impact on mortgage rates. But please don't worry. As the Fed rate cut cycle continues, mortgage rates will follow the Fed Funds Rate lower. The speed and frequency of future rate cuts will continue to depend on inflation and jobs data. [Source: Mortgage News Daily]
Here come the condos
In August, new home permits (+5%), starts (+10%), and completions (+9%) all had a nice bounce. During COVID, we saw a multifamily unit construction ramp near record levels. Well, those apartments and condos are now being delivered at a pace we haven't seen since 1975! And 60% of those are being built in the South (includes TX & FL), which could continue to put pressure on rental rates there. [Source: Census Bureau]
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Local Market Trends
As of Friday, September 20, 2024
In our local markets, conditions remain favorable for both buyers and sellers. Naperville and Geneva are seeing strong demand, with homes selling relatively quickly, which is excellent news for sellers. Schaumburg is holding steady, offering a good balance between pricing and inventory, making it a solid option for buyers. North Aurora presents opportunities for those willing to negotiate, with homes staying on the market a bit longer, allowing for potentially better deals. Overall, the local markets show stability, with opportunities for buyers and sellers to benefit.
Do you have any questions about these articles or your local market? Get in touch!
Karlton Uhm
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