As we approach the end of 2024, there’s growing speculation about the Federal Reserve’s actions on interest rates—and what it could mean for the real estate market. With the FED’s next talk scheduled for December, many had anticipated a potential rate cut, but current indicators suggest we may not see a change just yet. Instead, we’re more likely to witness a “push and pull” dynamic as the FED evaluates key data through early 2025, with additional talks set for March and August.
Fewer Rate Cuts on the Horizon
While we initially expected between six to eight cuts in 2025, the landscape appears to be shifting toward a more conservative approach. Current forecasts now suggest three potential cuts next year. Cutting less doesn’t necessarily indicate trouble, though. A stable rate outlook can reflect underlying economic strength, which has both positive and challenging implications for the housing market.
Favorable Buying Conditions Amid Rising Costs
For those looking to buy, conditions remain favorable despite rising costs in other areas. Homeowners and prospective buyers face increasing monthly fees, from insurance rates to various mortgage-related charges. These expenses are pushing monthly costs up, impacting affordability and influencing housing decisions. Many homeowners are feeling the strain, leading to a notable increase in renters across the market.
Looking Ahead
As we watch and wait for clearer direction from the FED, it’s crucial to stay informed. For buyers, the current environment still presents a good opportunity, particularly in a stable interest rate environment. For homeowners, managing rising monthly expenses is key. Price of insurance is up, a lot of “pricing” within the mortgage is going up (Wall Street Article FEES ARE BURNING HOME-OWNERS.)
Stay tuned for further updates as we track the FED’s decisions and their impact on our market.
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