Why high interest rates may be here to stay
#31
In the latest unexpected twist of real estate fortune—or misfortune, depending on what side of the deal you’re on—nearly 20% of homes sold in San Francisco last quarter were sold at a loss. In the city where the hills are steep, pandemic-era prices rose steeper, leaving many homeowners with a massive mortgage and deflating values.
While those selling in the red are seeing an average $155,500 loss in San Francisco, compared to the national median loss of just under $40,000, there’s a silver lining in the Bay Area’s foggy future: This is one market ripe with opportunity for cashed up buyers looking for a deal—especially when it comes to condos.
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🔊 Today’s Top Podcast Rec:
As a serial entrepreneur, agent, and content creator in Greater London, Toby Corban has a unique view on leveraging social media to build a business that works for you and with you. After going viral through a home tour video, today Toby has a wide following online and leverages his personal brand—plus organic press coverage—to connect with buyers and sellers. Catch Toby’s full story in the latest episode of Rise Above the Ranks.
TRACK THE TRENDS
MARKETS
Inflation comes in hot hot hot
With the latest inflation data released last week coming in just a little too hot for the Federal Reserve’s comfort, it looks like near-term interest rate cuts are on hold. As the Fed prepares for its next meeting, scheduled for the end of April, expert opinions are mixed on how these economic indicators will impact mortgage rates over the next few months—and what hold or cut options are still on the table:
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A few mortgage experts believe a small interest rate cut, 0.125% at most, is possible at the next meeting, which could have a minor lowering effect on mortgage rates.
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If the Fed chooses to hold rates steady at its April meeting, the next opportunity for a rate cut will be in June, when some are predicting a 50% chance of rate relief.
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Others anticipate that, even if an interest rate cut does occur, we’re likely to see mortgage rates stay in the 6% to 7% range throughout 2024, driven by bigger economic factors than the Fed cuts alone.
With a strong possibility that mortgage rates will remain flat or even rise slightly if inflation persists, there may be few buyer benefits to waiting for a more optimal market. Especially if home prices keep climbing.
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