Rates Continue to Improve

This has been a great month for mortgages as rates have softened nicely offering A rated borrowers an opportunity to lock in the high 6s and more challenging files are locking in the 7's instead of the 8's like they were just a month or so ago.

Whether or not this will create a bump in the buyer activity remains to be seen but if all of this holds and these new lower rates stick around through the New Year we may see a nice increase in buyer activity. I would also like to see some of the sellers that have been holding off on either upgrading or downsizing start listing their homes. 

Activity has been very slow on both sides of the market. A nice double bump would be well received by the industry. Keep in mind that historically the average mortgage is about 6.5% so we are now just barely above the 50 year average.

I still doubt we will see rates plummet down to the 2's and 3's anytime soon, maybe never, but 5's could be a reality within a couple years if the economic situation settles down.

So good news everyone the mortgage gods are giving you a Christmas present!

Quiet Holidays this Year? Probably.

It seems like we may have a quiet December in real estate this year. There is a lot going on in the market from stable but somewhat high interest rates putting the brakes on buyers, a lack of sellers willing to sell, and a bit of a negative outlook among the public about the state of the economy moving into 2024. 

2024 is a major election year. Generally during these election years politicians are looking to move towards an improving economy because they want to get re-elected. A foul economy is often a tide changer in elections whereby incumbents are vulnerable. I would expect to see action taken by the Administration in Washington DC to curb the economical roadblocks. 

If that happens would could see a nice spring bump in real estate and perhaps even see some sellers decide to come out of their shells, so to speak. Most of the activity in listings seems to be people moving away to be close to family elsewhere, or retirees moving to warmer climate, or mandated by job changes. Of course there is also the usual divorce and death that sometimes facilitates a need to sell the house. 

Honestly a sudden flood of listings would crash the local market so I'd prefer not to see that. But a little relief in rates just a single percentage point could provide the gentle nudge we need to get back to an active market.

We shall see how things unfold as the New Year takes shape. 

Interest Rates Improve

The last couple weeks has seen a nice measurable improvement in rates. Hopefully this will stabilize and allow home buyers that extra bit of breathing room. I doubt rate will improve a whole lot more but maybe the Fed will settle down a bit and just let these current rates percolate a bit before jumping to any conclusions about inflation.

Right now excellent borrowers are seeing rates in the range if 7.25% to 7.75% and borrowers with some financial and credit challenges are getting approved in the 7.75%-8.25% range. Although this seems high relative to recent rates just a couple years ago, this is only a little higher than the 50 year average. It would be nice to see some more relief maybe getting the "A" borrowers back under 7% but I am not holding my breath. This upcoming year is an election year so the politicians in power right now will want to hang on to that power so they may pass legislation or use other political maneuvering to try and ease the "pain" so as to stay in power. Perhaps the Fed will hold tight for now.

Prices on homes continue to be flat and stable. The median price in most local sub markets remains about what it was a year ago maybe a tad less or a tad more depending on the specific area.