Interest rates are dropping. Is it making a difference?
Interest rates have been dropping slowly and steadily since April, with rates hitting our lowest rate since Feb 2023 on September 11, 2024.
The last twelve months have ranged from 6.11% <---> 7.52%.
As we await Chairman Powell’s announcement this week, it’s worth checking to see what impact, if anything, this year’s rate drops have had on the housing market.
We’re digging our way out of the hole.
This part requires two visuals.
1. New listings (how many sellers are putting their homes on the market).
2. How much “active inventory” is there? (how many new listings aren’t selling)
Fewer people are selling their homes than any of the previous 7 years, except for last year.
That’s to be expected, as the higher interest rates last year *really* made homeowners reluctant to sell.
As fewer people have listed their homes and buyers have been fewer and further between, active inventory has risen.
Compared to pre-COVID, you’ll see that Colorado is now exactly back to where we were in fall 2019.
If we play this right, the pendulum can avoid swinging too far back the wrong way and stay in balance.
What does all this mean?
The pressure is on the Fed to start lowering rates - starting this week, which will continue pushing mortgage interest rates lower.
Ideally, interest rates could be around high 5%’s by the end of year. *fingers crossed*
This will open up opportunity for more refinances, offering financial relief for homeowners with 7-8% rates.
Lower rates will also make home selling and buying a more accessible option for homeowners who feel trapped in their current home because of their low rate.
New buyers who have saved up money but struggle to afford high monthly mortgage payments will begin to see payments come back toward an affordable range.
Do you hope to buy or sell in the next 12 months? Let’s talk NOW.
I’ve recently begun meeting with buyers and sellers who are sorting out their plans for the spring. Summer 2025 conversations aren’t too far away.
These clients are wise to start planning now. They will be in position to act quickly when the time is right.
If you have a desire to buy or sell, let’s chat.
Life has a way of keeping us all moving, and I’d love to be your real estate agent.
Contact me here to set up your free and confidential consultation.
Kevin
