Did we ever think this day would arrive? Those in the know kept saying rates will be better next year, and this is finally next year, and by golly, it appears they were right. Since nothing is ever that easy, there are discrepancies in rate predictions but generally the arrow is pointing down.
Forbes is predicting three rate cuts this year, assuming that inflation continues to slow. The National Association of Realtors’ Chief Economist Lawrence Yun says that because high budget deficits and inflation are still not at a comfortable level, mortgage rates will likely be in the 6% to 7% range for most of the year.
The Mortgage Bankers Association is forecasting 6.1% at the end of this year and 5.5% at the end of next year. Bank of America’s head of retail lending Matt Vernon is more cautious. He says rate cuts could breathe new life into the housing market but significant drops in mortgage rates might not happen in the early months of 2024. The Fannie Mae housing forecast is that the 30-year fixed rate mortgage will average 7% in the first quarter of this year and slowly decline over the year, landing at 5.5% in the fourth quarter. There certainly are more opinions but these are some of the top players in the industry and apparently, they all are looking to decline.
As of this writing, the average rates were 7.45% for a 30-year fixed rate and 6.68% for a 15-year fixed rate. Not bad, but we’re not there yet as you can see from the above opinions, however, there are ways to obtain a better rate now.
Boosting your credit score is a surefire way to pay a lower interest rate. Just a few points can help a lot and here are tips on how to achieve this: Make an extra payment on an existing mortgage or on credit card balances, spend less than 30% of the amount of credit offered to you on credit cards and pay off your balance each month in full.
You can also reduce your mortgage rate by paying points upfront on a new mortgage. Do the math and see if out-of-pocket money now to lower your long-term rate works for you. Finally, shop around and don’t take the first offer from a lender you call.
Let’s see what our January sales in Manatee County are, as reported by the Realtor Association of Sarasota and Manatee:
Single-family homes closed 10.9% more properties compared to January of last year. The median sale price was $525,000, up 3.8% and the average sale price was $735,836, up 13.1%. The median time to contract was 35 days this January compared to 32 days last January. New listings were up 32.3% from last January and the month’s supply of available properties was 3.9 months compared to 3.2 months last year.
Condos closed 8.8% more properties compared to January of last year. The median sale price was $357,990, up 3.8%, the same as single-family homes, and the average sale price was $441,573, up 12.6%. The median time to contract was 47 days this January compared to 26 last January. New listings were up 37.9%, and the monthly supply of available properties was 5.6 months compared to 3.2 months.
The increase in listings we’re seeing points to a more balanced market that favors buyers, along with the interest rate arrows pointing down. The weather arrows, however, are starting to point up, so go to the beach and let the real estate market find its own level.
