Saturday, September 23, 2023 / by Amy Brown
Since more inventory is coming on the market every day and home prices continue to rise, real estate experts advise to go ahead and buy, reap the benefits of equity gains, and then refinance in the latter part of 2024 when rates are expected to start declining. Here are the prospectives from some of our lending experts:
The Federal Reserve decided to hold interest rates steady, with an expectation of potentially one more rate hike before the end of the year.
- This indicates a more restrictive policy and a 'higher-for-longer' approach to interest rates to continue to stamp out inflation.
- The federal funds rate remains between 5.25%-5.5%, the highest in nearly 22 years. (Note: This is not the same as interest rates!).
- The inflation rate has dropped from 9.1% to 3.7% since June, getting much closer to the Fed's 2% target.
Though the Fed wants to see more progress on inflation, Fed officials are optimistic about economic growth in 2024.
What this means for home buyers:
Rate stability is better than a rate hike, and real estate still remains a strong and secure investment. Since mortgage rates can be unpredictable, many experts advise those in a solid financial position to: rent the rate and buy the home. So, it may be wiser to buy a home now to begin building equity and refinance when rates lower.
I agree with our lending partners in that homebuyers in a good financial position should go ahead and take advantage of less competition for homes in the current homebuyer marketplace. Right now you have a better chance of grabbing the home of your dreams without as much grappling, profiting from the equity gains, then getting that lower rate that you desire in the coming year. It’s a great buyer strategy in a tough real estate market.