The Federal Reserve’s interest rate cut, happening for the first time after 11 years, was expected to make a difference across the board in the country. A number of industries were affected by this change. The new interest rate was expected to make deals more profitable by lowering the costs of borrowing. Of course, the real estate market in the United States is no exception when it comes to the effects of this change.
Mortgage Rates at the Lowest
The mortgage rates right now are the lowest that they have been for a very long time. In fact, they are almost as low as the historic low rates. The recent development is encouraging a lot of people to jump on the opportunity to buy a home and reach for properties that were otherwise out of their price range before.
The fact that people have the ability to save so much now will definitely liven up the traditionally slow housing season. Builders are, in fact, ramping up their efforts as the demand in the housing market increases. July saw the pending home sales slump but came back up in August, according to a report by the National Association of Realtors.
Contract activity rose 1.6% month-over-month according to the report, and it showed an even more impressive climb since last year at 2.5%. The announcement of the benchmark 30-year fixed mortgage hit 3.64% this week, down from 4.74% last year.
Things are Looking Brighter than ever
The latest data of the market activity shows that home buyers are definitely taking advantage of the lower mortgage rates. The fact that it took potential buyers a while to spring into action is understandable, since low mortgage rates do not really offset home down payment – the largest hindrance when buying a house.
Regardless, the lower mortgage rates did boost buyer enthusiasm and optimism. The people buying homes have a significantly higher amount of monthly savings, and that is why they can extend their budgets.
Existing Home Sales is Promising
The pending home sales statistics are a good reason to be optimistic about the current real estate market in the United States. Existing home sales in August rose for the second month in a row. The increased buyer interest is actually resulting in closed deals since the rate cuts by the Federal Reserve. This spells good news for both homeowners and for buyers looking to buy real estate properties all over the country.
Are You Looking to Buy a House in Tampa?
Are you looking to take advantage of the lower mortgage rates and buy a home in the Tampa, Florida area? The time is right to invest in a home in the beautiful state of Florida’s Tampa Bay area.
If you need the support or guidance of experienced realtors who can help you get the best possible deal, you should contact the team at Enos Executive. For more information, just fill out the form here and let us know how we can be of service to you.
Wouldn't it be nice if real estate was predictable. Unfortunately - it is anything but that. There has to be room for the uncertainty, making real estate an exciting and invigorating industry. Below you will find insight from today's real estate experts.
“If mortgage rates trend sideways next year, as we anticipate, and home price appreciation continues to moderate, improving affordability should breath some life into the housing market," said Doug G. Duncan, chief economist at Fannie Mae.
National Association of Realtors
NARS anticipates home sales to plateau but the market price to continue to increase at a slower pace.
"The forecast for home sales will be very bring — meaning stable,” said Lawrence Yun, NAR chief economist
“Inventory will continue to increase next year, but unless there is a major shift in the economic trajectory, we don't expect a buyer's market on the horizon within the next five years,” said Danielle Hale, chief economist for Realtor.com
Redfin predicts the number of home owners will grow more rapidly in 2019 as speculators and investors leave the market.
“There’s quite a bit of uncertainty around our price forecast,” said Daryl Fairweather, Redfin chief economist. “There’s a real chance prices could fall below 2018 levels, putting up negative growth for the first time since 2011.”
National Association of Home Builders
“The market has been moving away from higher-end, higher-priced, larger homes over the last two or three years to more entry level,” he said. “Our surveys show we’ve gone from a new construction market that had been less than 20 percent dedicated to first-time home buyers to now closer to 30 percent, which is closer to historic norms.”
Mortgage Bankers Association
“The supply of homes for sale and lack of affordability continue to be challenges for the housing market,” wrote MBA economists Michael Fratantoni and Joel Kan. “Even with the anticipated cool down in economic growth, we expect that housing demand will remain strong, mortgage rates will stabilize, wage growth will increase and home price growth will moderate, providing favorable conditions for growth in the home purchase market.”
Enos Executive Team
Our team’s outlook on 2019 is this: if you are thinking about making moves, the time is now (pun intended). Majority of experts are predicting a more favorable year than 2018 and there is no guarantee for what 2020 will bring. The most important thing to keep in mind is that the market isn't necessarily unfavorable, rates are still low compared to historical averages, supply is increasing and the future will continue to be unpredictable.
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