The Fed Chairman hinted that it may be time for the rate relief. This will be welcome news to our beleaguered first time home buyers. It is an election year so I wouldn't be surprised if the Fed is getting a lot of pressure from incumbent politicians in Washington DC.
I would not expect a big drop nor would I expect a series of small drops rapidly accumulating. Rates are sitting right around 7% for a 30 year fixed mortgage and that is just a tick or two higher than the 50 year average. If the average gets down to the low 6s we should see a nice bump in buyers coming back to the market.
The problem getting sellers to list there homes will still be a problem as there is a large quantity of homeowners sitting on nice juicy 3% loans. I think we would need to get back down to the low 5's before we see any significant number of the 3 percenters making a move.
Meanwhile housing prices locally are steady. We are not seeing any real change in pricing. There are more price reductions but generally these are overpriced listings from sellers that were a little too ambitious with their price and the market kicked them in the soft area.
We are seeing some upward price pressure on homes in the median price range and some softening on homes priced in the upper ranges. A downtick in rates will be a boon to the upper price ranges as well.
