Let’s breakdown what we’re looking at: median prices in the area are climbing, we’re finally seeing more listings hitting the market, and the days on market are continuing to shrink. It’s obvious to see that our local market is holding strong, even amidst fluctuating interest rates. With the Spring Market bringing a bounty of new listings, it’s clear that buyer demand is still soaring above supply.
Want to dive deeper into a specific neighborhood in NOVA? Reach out to us, we’d be happy to help!
To help you better navigate this market, we put together a 6 STEP BUYER’S GUIDE to break down and simplify the buying process.
Mortgage Rates: What do you need to know?
You might have heard that mortgage rates are expected to remain elevated for a longer period than initially anticipated. If you’re curious about the reasons behind this, it’s linked to the most recent economic indicators. Here’s a brief summary of the current situation with mortgage rates and the projections provided by experts.
Photo from: Keeping Current Matters
As depicted in the graph, we are approaching the Federal Reserve’s target of 2% inflation, although we have not yet reached it. In fact, there has been a slight increase in inflation over the last three months, which is influencing the Federal Reserve’s strategies. As Sam Khater, Chief Economist at Freddie Mac, elaborates
“Strong incoming economic and inflation data has caused the market to re-evaluate the path of monetary policy, leading to higher mortgage rates.”
In essence, inflation and its repercussions on the overall economy will be pivotal going forward.
When can we expect mortgage rates to decrease?
According to current market data, experts anticipate better-controlled inflation and suggest the possibility of the Federal Reserve lowering the Federal Funds Rate later this year, albeit at a later time than initially anticipated. Mike Fratantoni, Chief Economist at the Mortgage Bankers Association (MBA), commented on the Federal Open Market Committee (FOMC) decision yesterday:
“The FOMC did not change the federal funds target at its May meeting, as incoming data regarding the strength of the economy and stubbornly high inflation have resulted in a shift in the timing of a first rate cut. We expect mortgage rates to drop later this year, but not as far or as fast as we previously had predicted.”
Simply put, this suggests that mortgage rates are expected to decrease later this year. However, the timing may change depending on new employment and economic data, ongoing geopolitical uncertainty, and other factors. This highlights why attempting to time the market is typically not a sound strategy.
If you’re curious about the current state of the housing market and how it affects you, reach out to us