It’s Happening!
It’s starting to look like the market is moving as we have been predicting: inflation is showing signs of dropping off, and we hope that it will continue to bring rates down. We watched last year: as inflation ran, high interest rates went up. Now, we are seeing inflation coming down and interest rates are falling.
It’s nice to see when it works out like we think it will!
Of course, a few months of data doesn’t mean that we are out of the woods. But we saw a few reports, such as CPI, come in a little better than unexpected. At the same time, we are seeing retail sales drop off. Those are all signs that what the Fed is doing is having the desired impact. It is slowing things down, which is what we should see happening.
How Does This Affect Real Estate?
As interest rates continue coming down, it will put more people in the real estate market. This current market already has constricted inventory. Historically speaking, people will move every seven years on average. That number has shifted to over 11 years now. One thing that is making people stay in their houses longer is that they have such great interest rates from years ago.
Since there are potential sellers attached to that rate, it will keep people in their homes longer which is going to keep inventory levels down. As inventory comes available, it’s likely to be quickly gobbled up by buyers. This dynamic could create upward pressure on home prices.
2023 is Starting Strong
Another piece of information that came up yesterday is how the first 2 weeks of this year have been the best 2-week for activity in the last 6 months. So, that’s a good sign that everyone is coming out from the holidays early and starting to make their moves in the market.
It looks like things are starting to happen right now. Hopefully the rates will continue to come down. We expecting a decent first quarter and feeling optimistic about the coming year.
If you are thinking about buying or selling your home, then reach out to me any time to discuss options for financing. I’m always here to help!
Bill is happy to run the numbers for you, with no pressure.
