Housing Reacts to The Federal Reserve's Pause in Interest Rate Hikes

If you're watching the market too closely, you may be doing a little fence sitting. There's nothing wrong with that. Stay informed, then jump when it's time to jump. With the Fed recently pausing interest rate hikes--it's been 15 long months--this might be that opportunity to jump. So will you?

The Federal Reserve's Pause in Interest Rate Hikes

The Federal Reserve recently announced their decision to pause interest rate hikes for the time being. This decision has been met with mixed reactions in various markets, but overall it is seen as a positive development. However, oddly, the reaction to inflation receding should have been positive for interest rates, yet the markets' reactions has seen mortgage rates tick up, then stabilize towards the end of last week and into this week. What's the deal? Normally mortgage rates love decreasing inflation.

Market Update

The real estate market has been experiencing a slow down until recent months. Home sales had slowed and inventory has decreased in many areas of the country. However, despite these challenges, the market remains stable. Prices have not seen a significant decline and are actually starting to inch back up. Low inventorys and high demand for those fewer available homes are sure to keep prices high.

The Pause in Interest Rate Hikes

Overall, the Federal Reserve's pause in interest rate hikes is seen as a positive development for the real estate industry. Interest rates directly impact the affordability of homes for buyers. Higher rates mean higher monthly mortgage payments, which can make homes less affordable for many people. The pause in interest rate hikes means that buyers will have more time to take advantage of low rates.

In addition, the pause in interest rate hikes could also stimulate the market. Lower rates mean that buyers can afford more expensive homes, which could lead to an increase in home sales. This could help to reduce inventory and stabilize prices.

What This Means for Buyers

For buyers, the pause in interest rate hikes means that they have more time to take advantage of low rates. If you are in the market for a new home, there are advantages to start looking now. With low rates and a stable market, you have more options and more time to find the right home for you.

What This Means for Sellers

For sellers, the pause in interest rate hikes means that there is still demand for homes. While the market may be slower than the last few years, demand is stout and the summer heat (after a lot of rain) isn't keeping buyers from still looking for the right home. Pricing your home appropriately and working with an experienced real estate agent can help you sell your home quickly and for the best price possible--and I know a guy.

Bottom Line

Overall, the Federal Reserve's pause in interest rate hikes is a good news for the real estate market. And while the Fed is taking a break from raising interest rates, there are some real advantages in the marketplace for buyers. Once rates drop, and they surely will someday, inventory will get squeezed from buyers jumping off the fence and snathcing up reamining housing until sellers get onboard. Will you still be on the fence when rates improve or will you be counting your equity gains from your new backyard watching all the fencesitters?