Fed cut = rates ticking up?

The Fed dropped the Discount rate half a percent and rates….ticked up!  If you read my blogs you know that I’ve been telling you 2 things.

One, mortgage rates don’t track directly with the Fed’s rate (they are literally one day rates) while mortgages are usually 15-30 year instruments.  Track the 10 year bonds for a better idea of where rates are going.

Two, this cut has been anticipated for so long that any reactions were already baked into the market.  The important thing to note is that the referenced baking has brought rates down by over a full percentage point in the last 2 months.  This is excellent news for buyers, and all the more reason to get after buying now rather than later.  Sorry folks the rates are not going down another percent in the next couple of quarters, so don’t sit on your hands waiting for that to occur before jumping in.

So what is going on locally?  We are up to a 1.4 months supply of homes on the market.  For perspective in March it was .5 months.  Why is that?  One reason is that some buyers are on pause anticipating further rate reductions and for the election to go down.

The other is that sellers are getting a little greedy, overpricing properties and having to take price reductions.  All this creates some opportunities for buyers that weren’t there in the spring.  Less competition, getting inspections and other concessions in contracts, etc.  Buyers, it’s time to jump in!

Reach out if you are ready to buy or sell and we’ll set you on the most profitable path.

It’s a good life.

Chris