This is such big news for home buyers and for homeowners.
The Fed says the time has come to begin cutting interest rates.
Hallelujah! The moment we have all been waiting for.
But this is a double edge sword.
It’s going to be good for home buyers,
and it’s going to be bad.
And here’s why you need to pay close attention.
For the last few years,
the No. 1 hurdle that home buyers faced was affordability.
The interest rates were too high,
the home prices were too high,
which meant the average US American household
was priced out of the housing market.
Now, because of that,
millions of potential home buyers who wanted to buy homes
put buying a home on the back burner because it was out of reach.
Now, this is going to be good for home buyers
because obviously monthly payments are going to be much less
with interest rates coming down,
which is a big win. This is going to be bad for home buyers
because all of that pent up demand
and all of the potential home buyers
that did not pull the trigger on buying a home
because of the affordability crisis,
if they start realizing that the interest rates are lower
and they start coming out of the woodwork
and testing their odds in this market,
which they likely will, competition is going to explode.
And we saw this in 2,021,
where there weren’t enough homes listed for sale
to support the Amount of buyers that were in that market
and that competition pushed home prices up even more.
Because of all of that,
I think the window of opportunity for home buyers
is going to close fairly quickly
as these interest rates come down. The more you know.