The Marketing Mama's Crystal Ball Real Estate Forecast
When the Federal Reserve started all those interest rate hikes back in 2022, especially after such low rates in the years prior, we, as a Nation were a bit shocked, to say the least. As an industry professional…I’m not gonna lie, it was scary. The combination of higher borrowing costs & increased home prices meant many of our buyers & sellers sat paralyzed in fear, all of which fostered the steepest real estate market slowdown since 2008. Having lived through that recession in this business in 2008, I wasn’t looking forward to being back there again.
But almost as if Santa himself was delivering it, in December, the Fed signaled that it was done raising interest rates & suggested that it would be cutting rates still in 2024. While their suggested rate cut would get us nowhere near the all-time historic lows of the 2-3% range, certainly cuts of even 1% make a huge difference in affordability. I know we humans like comparing apples to apples so here’s an example:
A $325,000 home purchased with 20% down & an 8% interest rate would have a principal & interest payment of $1,908.
Whereas that same home purchased with a 6.95% rate would have a principal & interest payment of $1,721. That’s a difference of $187! While $187 might not seem like a lot, over a year that’s $2,244 & over 30 years…well…let’s not even go there. I always cringe when I see amortization schedules in a closing package.
But, what about that same $325,000 home at a 6.25% rate? Principal & interest of $1,601, just over $300 each month in savings!
How do you like them apples?! By the way, if $187 or even $300 a month in savings doesn’t move the dial for you, then what are you waiting for in general?! Homeownership is the key to long-term financial stability. Remember, rate on rent is 100%, because you’re never getting it back. The equity in your home will make up for rate all day long, all day strong.
The bottom line is when the market starts rolling like this, no matter if you’re buying or selling, you need Exceptional Expertise on your side to best leverage every opportunity this market brings. So, if you’re a buyer & the higher rates priced you out of your market, now is absolutely the time to get with your trusted mortgage & real estate professionals. If you don’t have a trusted mortgage or real estate professional or you just want a FREE second opinion, please allow my team an opportunity to earn your business. Simply text or call 833.4YO.TEAM or email info@yourhometeamgroup.com for more info. If you’re a seller who has been on the fence, I’d love to have a personal conversation with you about your goals. You can text or call me at 855.4YO.MAMA or email me at amanda@yourhometeamgroup.com & we can get that ball rolling.
Ok, now time to break out my CRYSTAL BALL. Don’t worry, my crystal ball predictions are also backed with DATA. And, data always delivers RESULTS. But, I must tongue-in-cheek reference a crystal ball when making market predictions because the reality is ANYTHING can happen. We would never have anticipated a global pandemic, so since then…I like to keep a bit of plausible deniability, you know, in the event of a zombie apocalypse or alien invasion.
MY CRYSTAL BALL SAYS MORTGAGE RATES WILL TREND DOWN
As mentioned above, our gift from the Feds in December 2023 was that the worst is likely behind us. Economists & Analysts from Freddie Mac, Fannie Mae, the Mortgage Bankers’ Association, & Realtor.com all agree that rates will trend down this year. That’s the good news. The bad news? They also all agree that the days of the 3% mortgage rates are long gone, & more than likely will never return.
So, what does this mean for you? In general, when it comes to a home loan, borrowers simply need to adjust their expectations. You will not get a rate under 5% anytime soon or maybe ever again, but the good news is, the rates have gone down, so now is the time to see what that means for your personal profile.
Reminder that many things impact your rate, such as:
- Credit Score – higher credit score, lower rate
- Down Payment Amount – larger down payment, lower rate
- Property Type – single family home, lower rate
- Occupancy Type – primary residence, lower rate
The lower the rate, the lower the payment. But, you won’t know any of this until you have professionals like me & my nationwide network of agents & lenders to assist.
By the way, if rates do get down to the 6% mark or lower…we’ll more than likely be back to the bid-war days, so get in while the gettin’s good. Because when bid wars start, that means all the leverage you have as a buyer goes pretty much out the window. So, now is the time to secure an especially good deal. You have lower rates, leverage, & sellers ready to play ball. Sellers, you, too can enjoy the benefit of buyers’ lower rates because that will mean more & better offers. Text or #CallYourMama (that’s me) so we discuss maximizing your home’s sale potential.
MY CRYSTAL BALL SAYS HOME PRICES WILL STAY PUT
If I had a dollar for every conversation I’ve had with a tentative buyer over the past 18 months that they were just waiting for the home prices to crash, I’d have SO MANY DOLLARS. But, y’all, even 9% mortgage rates didn’t cause home prices to come crashing down. Actually, here in Central Florida, prices from 2022 to 2023 increased, just not as dramatically as they did from 2021 to 2022, but what I would say is a more stable market. Check out these overall stats:
Median SFR Sale Price Increase Per County, Central Florida:
- Volusia County 5.8%
- Orange County 4.1%
- Seminole County 4.7%
- Lake County 4.5%
*Source: Florida Realtors SunStats
In each of these counties there are pockets of places that may have seen a decline, like New Smyrna Beach (-13.7%, Volusia), Winter Garden (-5.5%, Orange), Casselberry (-15%, Seminole), & Leesburg (-3.8%, Lake) but in general, home prices are holding firm. Real estate is hyper local, & it’s important that you have a trusted expert to guide you through your options. If you have a question about real market stats, please reach out. Know that you deserve your real estate professional to guide you through all your options using data, not emotion, as that’s the best way to put you in the best position for success. Will home prices drop? Well, the experts are all in my court, agreeing that they’ll remain relatively the same with either a very slight fall of less than 2% to a maximum gain of around 4%. But one thing all experts agree on is if the mortgage rates fall faster than expected, which will open the market up to more buyers, well, home prices could soar higher. That’s economics 101: supply & demand.
What does it mean for you? All signs point to level home prices, so if you’re ready to & able to afford a home, it is time to get the answers you’re looking for. This market is still fairly slow, which is a great time to find the best bargains. Reach out so we can discuss your goals & budget. Whether it’s 3 weeks, 3 months, or 3 years, we can help you make an informed decision about the right time to buy for those goals & budget. And if you’ve been waiting to sell your home, now is the best time to maximize your equity gains while minimizing your competition. For recommendations and to find out what your home could sell for in today’s market: www.YourHomeTeamGroup.com.
MY CRYSTAL BALL SAYS THE WAIT IS OVER
We’ve all been waiting on the sidelines wondering what the heck is going on with these rates. Buyer demand cooled, which delayed plans for many sellers who were happy with their lower interest rates (even if they were no longer happy with their home). By all accounts, especially in the wake of the 2020 - 2021 frenzy, it felt as though the real estate market faucet had turned off.
However, as financing costs come down, sales volume will rise. These lower rates incentivize buyers with affordability as well as sellers ready to trade their existing home & level up, which will help add much-needed inventory to the market.
What does this mean for you?
BUYERS
The right time to buy is buying within your budget & when you can find a home that fits your needs. Building equity with any interest rate is a benefit that renting a home at 100% interest will never give you. And now, more than ever, sitting on the sidelines means you might miss out on better opportunities, because when mortgage rates decline it usually brings buyers back to the market in droves. So, get in the game; it’s GO TIME!
SELLERS
If you’re hoping to sell this year, the sooner you list, the better your odds are, as an increase in listings means more competition for you & the harder it could be to get your home to stand out. The good news is: we can put together the best game plan to maximize your profits, starting with a professional assessment of your home’s current market value. Please reach out to schedule a FREE consultation or request one online at www.YourHomeTeamGroup.com.
YOU DON’T NEED A CRYSTAL BALL WHEN YOU HAVE A PROVEN REAL ESTATE TEAM
Real estate is hyper-local, & the actual data of your market will have a huge impact on your buying or selling power. You deserve a trusted, professional real estate EXPERT who can give you a clear picture of your options & back it up with actual data. Your real estate goals are our MISSION. As your go-to for #AllThingsRealEstate, you can count on us to guide you through the market's twists and turns.
If you’re considering buying or selling a home in 2024, let my TEAM WORK for you!
Much love,
Amanda aka The Marketing Mama
Recent Posts
