Will this recent dip in interest rates help home buyers. We see that home prices are still sky-high nationwide and demand for housing is still outstripping supply. Buying a home is still out of reach for many buyers, especially those with low incomes living in areas seeing fast price growth. Borrowing costs are forecasted to drop even further this year and the worst for the housing market may just be an unpleasant memory soon.
Wall Street is currently betting that the Fed will cut rates aggressively this year, pricing in a large, half-point rate cut next month when Fed officials convene to set policy, followed by two quarter-point cuts by the end of the year. Lower mortgage rates and a bigger housing stock will eventually entice more buyers to eventually enter the market.
The Fed is still watching inflation data closely, waiting for additional evidence that price pressures are coming under control, but any further signs that the job market is deteriorating could nudge the central bank to cut rates more aggressively.
Buyers are getting some of their mojo back. While it is most certainly not a buyer’s market, it has been a long time since buyers have had this much leverage in the market.