Now that the summer season is here, I wanted to let you know about 6 key factors to be aware of regarding mortgage rates over the next few months.

Nobody has a crystal ball, but staying up-to-date on recent developments can help you form a strategy for your potential next moves across borrowing and real estate.

Fed & Interest Rates

The U.S. Federal Reserve has a major impact on what mortgage borrowers pay. At its June meeting, the Fed elected to keep rates unchanged–which has translated to slightly lower rates in recent days. Later this year, however, they are expected to raise rates two more times.

Home Trends

  • Home Prices: Some relief in home prices seems to be here in many markets. “Most likely we’ll see a little bit of decline followed by some months of subpar growth,” says Chief Economist Danielle Hale. We experienced a pullback in median home prices for sold homes in the first quarter of the year, and there is some evidence of additional price relief anticipated in 2nd quarter data (data release forthcoming).
  • Home Inventories: The most recent monthly active listing count data showed early signs of single-family inventory inching higher nationwide. This referenced data is national, so local markets may tell a different story.
  • Home Sales Activity: Sales activity of existing homes has slowed in recent months nationwide, with the effect of “higher” interest rates making some sellers reluctant to list. Perhaps when interest rates finally do cool somewhat, activity will pick up heavily. In contrast, new construction home sales activity has surged.

For Buyers 

Market timing is difficult to predict. Investing in a home can be the best equity-creating investment in a lifetime. If you have been on the fence about buying, there could be a slight pullback in 30-year mortgage rates, courtesy of the Federal Reserve not raising rates at their June meeting. Later this year, current expectations are for the Fed to raise rates again.

For Sellers

Overall, inventories remain low across most markets, but there are preliminary signs of climbing inventories. If you feel reluctant to sell because of a new mortgage with higher interest rates, there are potential solutions that we can discuss (such as refinancing down the line and others). I would love to talk with you and crunch the numbers.

Interestingly, when rates drop, more housing supply could come onto the market (contrary to conventional thinking) if enough sellers are wanting to take on new mortgages at lower rates.

Interest rates may be “higher” than people would like to see–but opportunity is always out there, especially with rent costs being as high as they are. Questions? Give me a call or send an email–I’m here to help however I can.

Thank you, and have a great day!