Watch the original video: Fresh Start.. October 1, 2024 - Market Update
October 2024 Real Estate Market Update
With interest rates finally dropping after years of inflation and high borrowing costs, the real estate market is poised for a major shift. This decline in rates opens the door for homeowners to refinance and buyers to re-enter the market, setting the stage for a potential housing boom in 2025.
The Locked-In Effect
Everyone knows that inflation has been high for the past few years, and with high inflation come high interest rates. This creates market conditions where people who either own homes or have a mortgage with a lower rate are unwilling to sell because any new property would come with extremely high rates. This is called the locked-in effect.
What will the Real-Estate Market look like in 2025?
Rates are finally dropping, so many homeowners are refinancing, and prospective buyers are revisiting the numbers that looked so discouraging 1-2 years ago. There’s also a huge number of potential buyers waiting on the sidelines to buy a home until after the 2024 presidential election. These factors, combined with dropping rates and limited inventory, will lead to a booming housing market in 2025. House prices have been increasing for the past two years, despite incredibly high interest rates, so now that they’re dropping, the market will be stronger than ever.
How will the Election impact the Housing Market?
There are strong opinions about which candidate will be better for the housing market. Both candidates have said interest rates need to come down, and supply needs to increase, so what you really need to pay attention to are the incentives they’re going to use to make that happen. I’ve seen plans for tax credits, down payment assistance, reduced regulations for builders, and more.
No matter which party is in office next year, I don’t see a housing crash happening in 2025. Last time we had a housing crash, there were over 4 million homes for sale, whereas today we have 1 million for sale with 15 million more households. So, the question you have to ask yourself is: why would all these people who have their homes paid off or have a low-interest-rate mortgage suddenly walk away from their homes? It’s just not going to happen.