Aloha everyone and welcome back to this month's version of the Island Land Company’s Blog. In this month's edition I want to take some time to go over the dropping mortgage rates. As you may or may not have known, mortgage rates have in fact dropped. The current 30-year fixed rate is 6.17% according to Mortgage News Daily, which by the way is a great website for up to date mortgage and lending news across the country. One of the more interesting take aways I had from this update was that the last time rates were this close to the 6% line was 01/01/2023.
This is great news for buyers and sellers alike really. With rates dropping to this extent there can be just gas to the fire to the real estate market effect. Being that buyers now can make a payment work more comfortably after the most recent ½ point drop that just happened. Seller’s also know this, with more buyers in play within the market, sellers too are more likely to put their property up for sale or even hold strong to their list price. The whole process and rhythm comes down to the principle of supply and demand. Demand will most likely go up due to more ready to go buyers that are willing and able to buy a home or residence with a newly structured loan percentage.
Now for my unsolicited opinion, I do think that the drop in interest rates will continue as we inch closer to election day. With that being said I think that there will be an effect on prices of properties, I believe that there may be grounds for prices to increase across the board. Now with that being said, I think that there will be a buffer period. Prices will not just instantly rise with the mortgage rate drop. There has to be time for the market to adjust. In my estimation and as I look back at the past history there seems to be about a 4 week period where the market will continue in its current trend, being that we are currently now in a buyers market with price drops happening fairly frequently and a slowing of new inventory hitting the market.
If you were thinking of making a move I feel that one of these buffer periods is what you would likely want to try and time within the market. Now as a disclaimer, I am not telling you to buy or sell right now. What I am suggesting is that you think about the current state of the market, while taking in the past as well as a potential future. (Side note: look more into past data, the data in the future doesn’t exist.)
Speaking of the future, post election what do you think will happen to rates and the real estate market? There really is no way to know, but if you do know let me know. You and I should become great friends and we could probably be out on a yacht in Milan in no time.
I again will offer my unsolicited opinion on what I perceive the future to hold. Again this is only my best guess, I have yet to find the crystal ball, but I think that there will be a continual lowering in rates up until the election then a possible interest rate spike, seeing as whomever wins the election will have new policies and spending plans that they will be putting into place. Will this rate spike be permanent? Again, past history would say no. Interest rates go up and interest rates go down. It is kind of what they do.
To wrap up, if you made it this far, thank you for taking some time out of your busy day and life to read my thoughts and opinions. I also would like to leave you with this: Election season and the state of our country and world right now can leave you a bit jaded and nervous no matter which side of the aisle you find yourself on. But no matter your affiliation or preferences I do encourage you to just go outside, talk to someone. You’ll notice what I see almost day in and day out. Whether it be in real estate or if I am working a shift at the restaurant, I am reminded that most people are pretty kind, and that there can be something taken or learned from every encounter or conversation you have with someone. It actually feels pretty great to just smile at someone and share some kindness. Hoping you have a fantastic finish to your September.
Written by Nate Konecky R-S