Fed Raises Rates, Mortgage Rates Decline
Updated: Apr 7
For the fifth week in a row, the mortgage interest rate has fallen! Good news for homebuyers! And probably home sellers as well in the coming weeks.
The Fed does not control interest rates
The Fed raised the short-term “Fed Funds Rate” 0.25% in March; 0.50% in May; 0.75% in June; 0.75% in July; 0.75% in September; and 0.75% in November, and it raised the rate again this week by .05%.
But if you look at mortgage rates over the last 12 months in this chart, you can clearly see that long-term mortgage rates do NOT always correlate to short-term Fed Funds Rates.
Although activity in the real estate market still may seem slow, there feels like some re-engagement from homebuyers happening again this week.
There was a probate sale in Concord last week. The house had some cosmetic updates/lipstick, and for the most part it had original windows and kitchen appliances. (Anyone remember Tappan ovens and dishwashers?)
Anyway, the home had a total of 7 offers! Priced a little low to begin with, but not far off the winning bid. So that means there are still 6 families looking for a home in the Concord area in the $800,000 price range. (4 bedroom home if anyone is thinking of selling right now.)
My clients had been looking for a new home for about a year. They became more serious and purposeful in the last couple of months and are able to take advantage of a really nice mortgage rate, while enjoying a wonderful home that they can move into an update as they please. Win-win for the probate estate and our clients.
So, the sky is not falling just yet!
Next year will be somewhat challenging economically, too, I believe; however, I feel that there will be pockets of more robust home sales and maybe slower mortgage rate fluctuations as the months go by.