If you have been waiting on the sidelines for the mortage rates to drop, there is some good and bad news as we move further into the new year. The rates are going to drop, but not as much as we would probably like them to.
The covid market was too wild with rates in the 2’s and some say that 2023 was too slow with interest rates reaching 8%, which was higher than they had been in about 2 decades. However, 2024 we’ll be headed in a stablizing market condition. The rates are expected to dip into the low 6’s and maybe even touch into the high 5’s which will normalize the housing market. This is not garauteed of course, the main cause of interest rate decrease is an ongoing improvement in inflation. We need to see inflation sustained or we could be looking at very different rate adjustments.
What lower interest rates could mean as we move forward:
Affordability of mortgages to start. For a $500,000 house, a jump from a 7.1 interest rate to a 6.1 interest rate is a savings of about $270 a month.
We could see an increase in inventory. When the interest rates are high; sellers are less likely to sell, because they can’t get another mortgage at the cost they have it now. They have to re-buy at a premium.
And lastly, we will have slower price growth. We have all seen OBX prices skyrocket over the last 3 years, as interest declines and more inventory comes on, prices will slowly start to stabalize.
All of this is shaping up to produce a strong and stable 2024 real estate market. So call me today and let me help make your beach dream home a reality!
