Fed Meeting Anticipation and Local Market Shifts: What Homebuyers Need to Know!
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, July 26, 2024
As the Fed prepares for its next meeting, the market anticipates potential rate cuts by year-end 2024, promising lower mortgage rates and a possible surge. Meanwhile, the real estate market shows signs of cooling, with easing competition and rising inventory, offering buyers better opportunities.
National Real Estate News
Fed to meet next week.
The market is convinced that the Fed will begin cutting short-term interest rates in September, but there's still a chance for a July 31 surprise. Overall, the market is looking for 50-75 basis points (0.50-0.75%) of rate cuts before year-end 2024. And when the cuts come, mortgage rates will move lower as well, which could lead to a fall/winter surge in transaction volumes. [Source: CME, Mortgage News Daily]
Subdued activity
Previously owned homes are changing hands at an annualized rate of roughly 4 million units. The last time that transaction volumes were this low was in 2008! Silver lining to this dark cloud? The inventory of homes for sale is rising, price growth is slowing, markets are becoming more balanced, and buyers are regaining negotiating power. [Source: NAR]
Competition easing
The residential real estate market starts to cool in June, with homes lingering on the market longer, fewer bidding wars, and lower sales prices. That said, 2024 is already looking a bit cooler than 2023. 29% of the homes sold in June 2024 transacted above their initial listing price. That was down from 30% last month and 33% a year ago. [Source: NAR]
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Local Market Trends
As of Friday, July 26, 2024
Aurora and Schaumburg saw slight price increases, while Geneva and Naperville experienced minor declines. Active listings rose modestly in all areas, with Geneva seeing the slightest change. Median days on the market they were increased slightly, indicating a slower selling pace.
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