Hey there!

Recently, Federal Reserve Chair Jerome Powell made an important announcement that might bring some changes to the housing market. I break down the details below. But first, please consider responding to the following survey so I can understand where you are in your real estate journey!

Table of Contents

• First Interest Rate Cut Confirmed

• What Does this Mean for Buyers?

• What Does this Mean for Sellers?

• Bottom Line

• PS…

First Interest Rate Cut Confirmed

The Federal Reserve has a dual mandate from congress. 1) To maintain maximum employment and 2) maintain stable prices. With inflation hitting 9.1% in 2022—the highest level in 40 years, the Federal Reserve has been focused on stabilizing prices over the past 2 years. This lead to the fastest and most aggressive interest rate increases we’ve seen in modern US history.

While prices are still much higher than pre-pandemic, the inflation rate has slowed down quite a bit hovering at 2.9% year-over-year as of July 2024, while unemployment has been ticking up over the past few months. Because of this, Jerome Powell announced it would be time for the Federal Reserve to start lowering the federal funds rate in September assuming inflation data between now and then stays anchored. That means mortgage rates should continue to fall further than they already have in the past month.

What Does this Mean for Buyers?

• Lower Mortgage Rates: If the Federal Reserve lowers the federal funds rate, mortgage rates are likely to go down. This means you could pay less interest on a home loan, making it cheaper to buy a house.

• Increased Buying Power: With lower rates, you might be able to afford a more expensive home or reduce your monthly payments on the home you want.

• Act Quickly: If you're considering buying a home, keep an eye on these changes. Lower rates could lead to more competition, as more people might decide to buy homes. As we approach a seasonally slower time of year these next couple of months, you might have a sweet spot where you can get a really good deal on a home, with a lower interest rate.

What Does this Mean for Sellers?

• More Buyers in the Market: Lower mortgage rates can attract more buyer demand, which leads to more offers on your property.

• Potential for Higher Prices: With increased demand, you might be able to sell your home at a higher price.

• Timing is Key: If you're thinking about selling, now might be a good time to prepare your home for the market to take advantage of increased buyer interest.

Bottom Line

In summary, the potential for lower mortgage rates could make this an exciting time for both buyers and sellers. Whether you're looking to buy your next home or sell your current one, my hope is to keep you informed on what’s happening in the market and be of value as you prepare for your next move.

Feel free to reach out if you have any questions or need assistance navigating these changes. I'm here to help!

Here to serve,

PS…

If you’ve taken out a mortgage in the last 2 years, and you’re not looking to move any time soon, there may be an opportunity for you to refinance your mortgage to a lower interest rate in the coming months/years, lowering your monthly payment. If you need recommendations from top notch lenders who will treat you like royalty, let me know!

If you're crazy and don’t want to miss one of these emails, or want to review previous publications easily, you can now add this newsletter to your phone as an app. Here’s how: