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What will 2024 market look like? This is the biggest question we receive on a daily basis. Although no one has a a crystal ball, here are our thoughts on 2024. The Federal Reserve, as you may know has been hiking rates to an unprecedented level to get inflation to come down to their preferred level of 2%. This increase in the Fed Funds rates and consequently the 10 year treasury rate has impacted mortgage rates to a level not seen in many years. Current rates are hovering between 7.75 and 8.0 percent depending upon the lender and fico scores. Naturally, this has slowed down the housing market, which was one of the goals of the rate hikes. Interestingly enough, homes that are well priced and in good locations are still selling rapidly, especially homes under 2 million. On the other hand, if a home is overpriced, or not in a desirable area, these homes will sit on the market until the price reflects the condition, location.
The consensus is that due to the rate hikes, the economy is already starting to slow and the Federal Reserve will more than likely start lowering rates in the first quarter of 2024. Our prediction is that once the Feds have started on the path of reducing rates, this path will continue thru 2024. Our advice to our clients is to wait until the first rate reduction before making a move on a property. The mistake that many buyers make is to wait until rates drop further and then make a move. What typically happens when rates bottom out is that everyone gets into the market at the same time as they have all been waiting for this event. This then results in heightened activity and again, we start seeing multiple bidding wars with homes selling over asking prices. The right time to get in is after the first reduction. Typically, after the first reduction, there will be additional reductions and once the rates do come down further is a great time to refinance and lock in a lower rate.
As the year progresses, we will provide further updates. In the meanwhile, please feel free to contact us with any questions that you may have. With over 20 years of experience in all markets, our goal is to provide you with the most up to date information possible. |