I've been looking online at property in other states, some have a note of 21/2 to 4% buyers premium on them. I guess now they are wanting buyers to pay some of the commission. Anyone know more about this?? or if this will happen here??

https://www.cnn.com/2023/11/30/economy/us-pending-home-sales-october/index.html Have we crashed?

Pending home sales just hit their lowest level in history.

In October, US pending home sales fell 1.5% putting sales down 6.6% over the last year.

This also marks the 23rd STRAIGHT decline in US pending home sales.

To put this in perspective, pending home sales are more than 10% BELOW what they were in 2010.

They are also ~3% below the pandemic low when the global economy was in a lockdown.

All as mortgage demand is at its lowest levels since 1994.

The housing market is coming to a complete halt.

New home sales were up from last year.

I don't think the housing market is coming to a complete halt.

I think an overheated market is cooling off a bit.

New home sales were up from last year.

I don't think the housing market is coming to a complete halt.

I think an overheated market is cooling off a bit.

When money is free and mortgages easy to qualify for then the market soars... and is part of the inflation problem. It is inevitable that home sales had to wane in order to curb inflation. This is a correction period.

I've been looking online at property in other states, some have a note of 21/2 to 4% buyers premium on them. I guess now they are wanting buyers to pay some of the commission. Anyone know more about this?? or if this will happen here??

It might be in response to the NAR lawsuit. The standard commission model is, at least arguably, in doubt at this point.

https://amp.cnn.com/cnn/2023/11/05/homes/nar-verdict-real-estate-commission-fee/index.html

~2300 Pending in OKC MLS this morning. That's a very low number. Actives are well over 5,000.

~2300 Pending in OKC MLS this morning. That's a very low number. Actives are well over 5,000.

Afraid I have no idea what you mean. Could you possibly explain further? Thanks.

Afraid I have no idea what you mean. Could you possibly explain further? Thanks.

A pending home sale is one where the paperwork is being filed but the contract hasn't been signed. At least I'm 90% certain that's what it means. Actives are the number of homes for sale in the market. Be it new or existing homes.

A pending home sale is one where the paperwork is being filed but the contract hasn't been signed. At least I'm 90% certain that's what it means. Actives are the number of homes for sale in the market. Be it new or existing homes.

That is helpful. but, I am also looking for seasonal and historical comparison data. Say, for instance, "2300 pending is 15% lower than 2022". That looks bad. But what if the full sentence is "which was 65% higher than 2019"? Now how does it look? Also, how do the pending's traditionally look between Thanksgiving and the end of the year?

A pending home sale is one where the paperwork is being filed but the contract hasn't been signed. At least I'm 90% certain that's what it means. Actives are the number of homes for sale in the market. Be it new or existing homes.

Pending, or under contract, means all contracts have been signed. Inspections, appraisals, ect still have yet to be completed.

Pending, or under contract, means all contracts have been signed. Inspections, appraisals, ect still have yet to be completed.

I understand that, sir. My question is how does these numbers compare with historical and seasonal averages?

Let's go back and compare Nov 2023 to Nov 2021.

In November 2023, there were 2160 sales.
In November 2021, there were 2967 sales.
A 27% decrease.

In November 2023, the average sold price was $274,227
In November 2021, the average sold price was $262,232
A 4% increase.

In November 2023, the average Days on Market was 44.
In November 2021, the average Days on Market was 29.
A 34% increase.

In November 2023, the # of Active listings in that month was 13,657.
In November 2021, the # of Active listings in that month was 9,461.
A 30% increase.

The Inventory is the average of how long it would take to sell the current Active homes if no new properties were added to the market.
In November 2023, we had 6.3 months of inventory.
In November 2021, we had 3.4 months of inventory.
A 46% increase.

January 2023-November 2023, total sales. 27,569
January 2021-November 2021, total sales. 33,279
A 17% decrease.

Lastly,
November 16, 2023 interest rates. ~7.44%
November 10, 2021 interest rates. ~3.38%
A ~54% increase.

Let's go back and compare Nov 2023 to Nov 2021.

In November 2023, there were 2160 sales.
In November 2021, there were 2967 sales.
A 27% decrease.

In November 2023, the average sold price was $274,227
In November 2021, the average sold price was $262,232
A 4% increase.

In November 2023, the average Days on Market was 44.
In November 2021, the average Days on Market was 29.
A 34% increase.

In November 2023, the # of Active listings in that month was 13,657.
In November 2021, the # of Active listings in that month was 9,461.
A 30% increase.

The Inventory is the average of how long it would take to sell the current Active homes if no new properties were added to the market.
In November 2023, we had 6.3 months of inventory.
In November 2021, we had 3.4 months of inventory.
A 46% increase.

January 2023-November 2023, total sales. 27,569
January 2021-November 2021, total sales. 33,279
A 17% decrease.

Lastly,
November 16, 2023 interest rates. ~7.44%
November 10, 2021 interest rates. ~3.38%
A ~54% increase.

Thank you for the helpful numbers. Very good.

My question now is that 2021 might appear to be a pandemic bounce back year, so how we would compare 2019, 2020, 2021, 2022 and 2023 YTD?

Nov 2023 vs Nov 2019

In November 2023, there were 2160 sales.
In November 2019, there were 2221 sales.
A 3% decrease.

In November 2023, the average sold price was $274,227
In November 2019, the average sold price was $201,935
A 26% increase.

In November 2023, the average Days on Market was 44.
In November 2019, the average Days on Market was 49.
A 10% increase.

In November 2023, the # of Active listings in that month was 13,657.
In November 2019, the # of Active listings in that month was 12,659.
A 7% increase.

The Inventory is the average of how long it would take to sell the current Active homes if no new properties were added to the market.
In November 2023, we had 6.3 months of inventory.
In November 2019, we had 6.0 months of inventory.
A 5% increase.

January 2023-November 2023, total sales. 27,569
January 2019-November 2019, total sales. 27,448
A .4% increase.

Lastly,
November 16, 2023 interest rates. ~7.44%
November 10, 2021 interest rates. ~3.75%
A ~50% increase.

Interesting, so except for price and interest rate, everything is pretty much the same, with the difference being pretty negligible in every other category...

Interesting, so except for price and interest rate, everything is pretty much the same, with the difference being pretty negligible in every other category...

Yep. In November 2022 the average price was over $281K. So we dropped year over year by ~2.5%. Just a sign of things coming back to earth.

Yep. In November 2022 the average price was over $281K. So we dropped year over year by ~2.5%. Just a sign of things coming back to earth.

How much do we owe you for all the work/data you did/gave us? :D

Nov 2023 vs Nov 2019

In November 2023, there were 2160 sales.
In November 2019, there were 2221 sales.
A 3% decrease.

In November 2023, the average sold price was $274,227
In November 2019, the average sold price was $201,935
A 26% increase.

In November 2023, the average Days on Market was 44.
In November 2019, the average Days on Market was 49.
A 10% increase.

In November 2023, the # of Active listings in that month was 13,657.
In November 2019, the # of Active listings in that month was 12,659.
A 7% increase.

The Inventory is the average of how long it would take to sell the current Active homes if no new properties were added to the market.
In November 2023, we had 6.3 months of inventory.
In November 2019, we had 6.0 months of inventory.
A 5% increase.

January 2023-November 2023, total sales. 27,569
January 2019-November 2019, total sales. 27,448
A .4% increase.

Lastly,
November 16, 2023 interest rates. ~7.44%
November 10, 2021 interest rates. ~3.75%
A ~50% increase.

Great stuff. Thanks for all the hard work!

Great news for all with rates falling quickly after Fed signals 3 cuts looking into next year. We are way off the peaks in October and activity picking up already. Demand, sales & prices should begin to go back up from here. Next year should be a good year and whenever we get back into the 5's probably have another mini boom.

Great news for all with rates falling quickly after Fed signals 3 cuts looking into next year. We are way off the peaks in October and activity picking up already. Demand, sales & prices should begin to go back up from here. Next year should be a good year and whenever we get back into the 5's probably have another mini boom.

A mini boom across all prices ranges or confined to certain ranges? I am guessing 300k and below will do well, but I do not have the experience to predict the effects.

Great news for all with rates falling quickly after Fed signals 3 cuts looking into next year. We are way off the peaks in October and activity picking up already. Demand, sales & prices should begin to go back up from here. Next year should be a good year and whenever we get back into the 5's probably have another mini boom.

Question: if we have another "mini boom," won't this just further drive up prices and lead to increased inflation?

Great news for all with rates falling quickly after Fed signals 3 cuts looking into next year. We are way off the peaks in October and activity picking up already. Demand, sales & prices should begin to go back up from here. Next year should be a good year and whenever we get back into the 5's probably have another mini boom.

Interesting that the fed is thinking cuts next year when they are not even close to the 2% inflation goal. I guess the new norm is gonna be 4-5% for a while.

A mini boom across all prices ranges or confined to certain ranges? I am guessing 300k and below will do well, but I do not have the experience to predict the effects.

I would think it would be across the board, we still have a supply/demand imbalance when it comes to existing inventory so certainly anything below the median price points should go up since there is more competition & demand. Prices on the whole have pulled back last few months, it's only natural they'll bounce back as rates fall.


Question: if we have another "mini boom," won't this just further drive up prices and lead to increased inflation?

Prices should go up as rates fall naturally but I don't think that in and of itself will lead to increased inflation. Supposedly rents will be coming down (so they've been saying for nearly 2 years) and that in & of itself should decrease inflation. Prices have pulled back again this fall/early winter so far exactly like last year but next year with rates falling in the back half of the year any price gains from spring/summer should hold & go up as rates trend down next couple years. My guess is we see 10-15% price appreciation over the next 2 years dependent upon the end level of rates.


Interesting that the fed is thinking cuts next year when they are not even close to the 2% inflation goal. I guess the new norm is gonna be 4-5% for a while.

CPI was 3.1% in November and core PCE is also down sharply. Powell said in his presser after last weeks meeting they recognize they need to cut before getting to 2% so they aren't too far behind the curve and doing more unnecessary damage to the economy. Fed was way behind the curve in 2021 leaving rates way too low for far too long and same thing here just to the downside. We will be back in the 2's here very shortly paving the way for cuts to begin.

Anecdotal info: Homes in my development in NW OKC which is split between PC and Deer Creek schools, were built 15-20 years ago, ranged in listing price in 2023 from $380k to $525k, and the ones listed this year, with one overpriced exception, were all under contract and closed between 45-60 days from listing date selling within 1-3% of original listing price, Two have been listed since November 1 @ $425k and $450k and are already under contract.

Just wanted to add to the discussion:

Tomorrow we are closing on a new home purchase in the Crestwood neighborhood of OKC (Bound by NW 23rd, 16th, May and Villa). We are paying 20% down to avoid PMI and are locking in at 7% for 30 years. We have lived in our current house for 16 years, paid it off three years ago and will keep it as a rental. Our plan is to wait until rates drop a little and then refinance on a 15 year. We did the same thing when we bought our house in 2007. We locked in at 6.875% for 30 years then refinanced in 2011 at 4.5% for 15 years and our payment only went up $20 per month. I am hopeful that we can do the same thing in 3-5 years, but we can afford the higher payment. I have always heard marry the house, date the rate.

Just wanted to add to the discussion:

Tomorrow we are closing on a new home purchase in the Crestwood neighborhood of OKC (Bound by NW 23rd, 16th, May and Villa). We are paying 20% down to avoid PMI and are locking in at 7% for 30 years. We have lived in our current house for 16 years, paid it off three years ago and will keep it as a rental. Our plan is to wait until rates drop a little and then refinance on a 15 year. We did the same thing when we bought our house in 2007. We locked in at 6.875% for 30 years then refinanced in 2011 at 4.5% for 15 years and our payment only went up $20 per month. I am hopeful that we can do the same thing in 3-5 years, but we can afford the higher payment. I have always heard marry the house, date the rate.

This is the way, nice job!

Just wanted to add to the discussion:

Tomorrow we are closing on a new home purchase in the Crestwood neighborhood of OKC (Bound by NW 23rd, 16th, May and Villa). We are paying 20% down to avoid PMI and are locking in at 7% for 30 years. We have lived in our current house for 16 years, paid it off three years ago and will keep it as a rental. Our plan is to wait until rates drop a little and then refinance on a 15 year. We did the same thing when we bought our house in 2007. We locked in at 6.875% for 30 years then refinanced in 2011 at 4.5% for 15 years and our payment only went up $20 per month. I am hopeful that we can do the same thing in 3-5 years, but we can afford the higher payment. I have always heard marry the house, date the rate.

great thinking Congrats on new home.

Mortgage demand fell to a new 30-year low in January 2024, down 54% from the pandemic peak, according to Reventure.
Mortgage demand is down 14% over the last year and 40% from pre-pandemic levels.
Even as mortgage rates have come down from 8.1% to 6.8%, mortgage demand is getting worse.
Still, 90% of borrowers have mortgage rates below 5%.
Even with a drop from 8% to 6% mortgages, many homeowners have a financial disincentive to move.
Affordability is getting worse.

January was a pretty hot month in the market, a lot of people contracted who had been on the fence or were unable to last year and we saw a big shift. More homes went pending the last 2 weeks than came on the market. First time in several months that has occurred. Spring market has come early but looks like the Fed has kicked the can down the curb on rate hikes. Still things are looking much better than last year & prices will gradually go up from here as rates gradually come down.

Still crossing my fingers I can refinance soon

January was a pretty hot month in the market, a lot of people contracted who had been on the fence or were unable to last year and we saw a big shift. More homes went pending the last 2 weeks than came on the market. First time in several months that has occurred. Spring market has come early but looks like the Fed has kicked the can down the curb on rate hikes. Still things are looking much better than last year & prices will gradually go up from here as rates gradually come down.

Appreciate the info and analysis.

I walk a ton through my neighborhood and there are very few homes for sale at present. Part of that is the time of year, but I can't recall so little inventory in my 5-6 years living in this area.

It seems the nicely remodeled homes are the ones that are going particularly fast. People are too busy these days to buy cheap and then deal with a remodel... Everyone wants things done before they move in. Still a lot of flips in my area and you see them almost everwhere in the core.

Still crossing my fingers I can refinance soon

I am grateful I refinanced in November 2020.

Appreciate the info and analysis.

I walk a ton through my neighborhood and there are very few homes for sale at present. Part of that is the time of year, but I can't recall so little inventory in my 5-6 years living in this area.

It seems the nicely remodeled homes are the ones that are going particularly fast. People are too busy these days to buy cheap and then deal with a remodel... Everyone wants things done before they move in. Still a lot of flips in my area and you see them almost everwhere in the core.

Yea the existing inventory levels are still pretty low although they have improved quite a bit. We have a significant amount of new construction on the market but many can't afford a brand new home even at entry level prices. I think we'll see more listings this year and more buyers enter the market as well as folks are realizing that rates aren't taking another big drop anytime soon.

Appreciate the info and analysis.

I walk a ton through my neighborhood and there are very few homes for sale at present. Part of that is the time of year, but I can't recall so little inventory in my 5-6 years living in this area.

It seems the nicely remodeled homes are the ones that are going particularly fast. People are too busy these days to buy cheap and then deal with a remodel... Everyone wants things done before they move in. Still a lot of flips in my area and you see them almost everwhere in the core.

Remodeling is also expensive now as well as getting a reliable contractor to do work. I found myself doing more DYI projects than I normally would just because the cost is still high in the construction industry. Which I am sure will level out in the next 10 years.

Remodeling is also expensive now as well as getting a reliable contractor to do work. I found myself doing more DYI projects than I normally would just because the cost is still high in the construction industry. Which I am sure will level out in the next 10 years.

The problem is that any good tradesmen are tied up by home builders or flippers because they offer them continuous, steady work. It's very hard to find someone who does good work to do small jobs because they are all busy.

I'm getting ready to replace all my interior doors, baseboards, casings and a good chunk of my flooring and I've pretty much decided to do it myself, bit by bit. Worse case, I'll have to pay someone to finish what I start but I did this same project in my house in California and it was extremely satisfying, although back-breaking.

Quick February Market Update - things cooled a touched as mortgage rates rose back above 7% in comparison to January. We are still in a bit of a hot/cold market as we experience big rate volatility still.

Of note though prices moved up 4% total from January to February and moved up a staggering 6.4% year over year from Feb '23 to Feb '24. As buying conditions continue to ease prices should continue to steadily climb from here. If you know anyone waiting for rates to fall might want to take advantage of the opportunity now because prices are going to continue to rise.

There has been a settlement on realtor commissions.

https://www.cnn.com/2024/03/15/economy/nar-realtor-commissions-settlement/index.html

I wonder if there will be stair step pricing and not just a flat 6% rate? Is there really linear amount of additional effort to sell a 200,000 dollar home vs a 500,000 dollar home?

Is there really linear amount of additional effort to sell a 200,000 dollar home vs a 500,000 dollar home?

that answer is no ..

that answer is no ..

I disagree. They will want to sell the higher one faster to get the higher percent ;)

There hasn't been a settlement on commissions. They have always and will always be negotiable. The old guard hates this but I have never done a deal for the straight supposed rate, it's been different for each one. Most of the time it's performance based. The listing agent has always controlled how much commission to give to a buyers agent. We had to disclose to the seller what we were giving the other side all along. The seller in the original lawsuit basically got the the closing table and acted like he didn't agree to pay the listing agent. From what I read it was disclosed to him. Once again, the listing agreement is between the seller and I to pay me a certain amount to do what I need to do to sell their house. That includes me offering a contract on the MLS for a certain rate for someone to bring me a buyer. If I procure the buyer, then my rate was always reduced.

The biggest change to me is that the MLS protected the buyers agent by offering a set amount in the MLS. Now it will NOT be allowed. This is to prevent an agent possibly not showing a certain property if an amount was lower than they wanted. So now, a listing agent is going to be bombarded with calls and texts once a listing goes live to see if the seller if going to offer any compensation. If the seller doesn't want to offer any, or a reduced amount, then (like or not) an agent still will probably move along and go to another property. I have rarely reduced the buyer agent side. You never know how many houses they have shown that client, how long they have been working for them, ect. Just doesn's seem right.

The biggest loser here is the buyers agent. If a seller doesn't want to offer compensation, then I have to ask my buyer to cover whatever amount we agreed to up front. If the buyer can't afford me, then 99% of the time they will just go to the listing agent and that agent will get both sides, cutting me out. If a seller is open to compensation but my buyer can't afford it, I can now send a compensation agreement to to the seller to have them pay for my commission. Guess what, we are back where we started.

VA buyers are legally not allowed to pay any commissions. So as it stands right now, if you represent a VA buyer and seller won't offer commission to the buyers agent, then buyers agent is screwed.

If they think that prices are going to come down and be more affordable, I think they are kidding themselves. The seller will just pocked more $$$. I will always highly encourage a seller to offer compensation.

It's more important that ever for me to switch my business to trying to acquire as many listings as possible.

Good or bad, I think this will severely weed out your weekend realtors as well. Just too much uncertainty right now.

A judge still has to approve it, however I wasn't expecting to see NAR agree to settle it so quick. As Richard said not being able to advertise compensation in the MLS will be a big change. Buyer broker agreements will now be required like a listing agreement on the selling side. Honestly, that may be a good thing. Will waste an awful lot less time not messing around with serious buyers.

Buyers that can't afford an agent will be adversely impacted. If you think they will negotiate a better deal for themselves through the listing agent representing the seller that's not going to happen. Not to mention on their own during inspections, appraisal, etc. It's a lot sometimes and experienced agents will save buyers thousands. Sellers will just pocket more and we will be compensated well to ensure they do. Also, VA buyers are totally screwed. It's really hard to get VA offers accepted sometimes even if you know all the right things to do. May see even less veteran offers getting accepted if they can't afford an agent (most can't). FHA a touch easier.

Commissions have always been negotiable & it is highly encouraged to offer competitive buyer compensation. I'm not sure how much this will change as there have always been flat fee options, discount agents, etc. There are tons of them out there and you get what you pay for I don't think that will change much. Experienced agents, especially ones with large marketing exposure, will still charge 6% in many cases. I'll still pay 3% to sell a personal property, it will bring me the most qualified buyer and I'll also have a more motivated buying agent to get it done.

We have way too many agents out there already, if anything hopefully it will weed out the ones who barely do any business and generate more business towards experienced agents. Listings will be more critical for agents and although the expertise and knowledge on how to win those won't change it's really the buyers agents that do all the running around working like crazy sometimes. I sincerely hope that buying agency isn't affected too much just because I know how much we help them and guide them through the process. Especially the mid and lower priced points, first time buyers, and people who are generally not knowledgable on the home buying process. Buying a house is very hard sometimes and a lot work.

We'll see what happens, 2024 has been a bit of a roller coaster already.

Recommendation for residential mortgage lender(s) local, or does it matter?

For central okc property. Thx

Recommendation for residential mortgage lender(s) local, or does it matter?

For central okc property. Thx

Recently used Tinker had good transparent rates on their website. Good experience

We'll see what happens, 2024 has been a bit of a roller coaster already.

How are you enjoying the ride so far?

How are you enjoying the ride so far?

I'm ready to get back to a less restrictive rate environment. Business has been good & pretty steady considering but the higher end stuff is a bit of a stalemate and things are still constricted. Affordability is really a challenge now & won't get any easier. As a whole though rates have been higher than expected and things have been slower than what we were anticipating in January when they got down in the low 6's. Hopefully with the economy & labor market showing signs of cooling finally we can still get 1 or 2 cuts later this year and things should really pop at that point.

Recently used Tinker had good transparent rates on their website. Good experience

Tinker, I'll check them out

Thx!

Check out this article from The Oklahoman:

Buyers want affordable downtown housing, but OKC prices continue to go up

https://www.oklahoman.com/story/news/2024/06/16/downtown-okc-housing-prices-are-skyrocketing-but-will-that-continue/74084590007/

Housing inventory in the OKC Metro Area has been going up, as well as price reductions. I've been keeping track of it for months now. If mortgage rates don't come down appreciably, we may begin to experience a housing price correction of sorts.

Housing inventory in the OKC Metro Area has been going up, as well as price reductions. I've been keeping track of it for months now. If mortgage rates don't come down appreciably, we may begin to experience a housing price correction of sorts.

It's going to be interesting to see if we hit new average all time highs at the end of this month or next. We were only slightly higher than where we were a year ago coming into June and the trends of last 2 years in this environment suggest we will hit new all time highs. It really depends upon the price point though- sub 300k is still going strong.

It sounds like we are on track for a December rate cut and then several more next year potentially. I could see prices pulling back a little again in the Fall, just like last 2 years, if rates stay high until then. So far they are trending down on lighter inflation data over the last few weeks which should help.

Fed's Khaskari said on face the nation yesterday best thing they can do for the housing market is get inflation back to normal. If they cut it's likely to drive prices up and not help affordability. I don't agree with his first statement but certainly the second. If we get 4-5 rate cuts like projected between now & this time next year there will be a lot of demand. In a perfect world the additional supply would help balance it out but there will still be a lock-in effect that will handicap the market long term so there's still going to be a supply/demand imbalance at least at the affordable price points.

It's going to be interesting to see if we hit new average all time highs at the end of this month or next. We were only slightly higher than where we were a year ago coming into June and the trends of last 2 years in this environment suggest we will hit new all time highs. It really depends upon the price point though- sub 300k is still going strong.

It sounds like we are on track for a December rate cut and then several more next year potentially. I could see prices pulling back a little again in the Fall, just like last 2 years, if rates stay high until then. So far they are trending down on lighter inflation data over the last few weeks which should help.

Fed's Khaskari said on face the nation yesterday best thing they can do for the housing market is get inflation back to normal. If they cut it's likely to drive prices up and not help affordability. I don't agree with his first statement but certainly the second. If we get 4-5 rate cuts like projected between now & this time next year there will be a lot of demand. In a perfect world the additional supply would help balance it out but there will still be a lock-in effect that will handicap the market long term so there's still going to be a supply/demand imbalance at least at the affordable price points.

i don't think we are currently on track for any rate cut this year ... and especially not 4-5 in the next year ..

It's going to be interesting to see if we hit new average all time highs at the end of this month or next. We were only slightly higher than where we were a year ago coming into June and the trends of last 2 years in this environment suggest we will hit new all time highs. It really depends upon the price point though- sub 300k is still going strong.

It sounds like we are on track for a December rate cut and then several more next year potentially. I could see prices pulling back a little again in the Fall, just like last 2 years, if rates stay high until then. So far they are trending down on lighter inflation data over the last few weeks which should help.

Fed's Khaskari said on face the nation yesterday best thing they can do for the housing market is get inflation back to normal. If they cut it's likely to drive prices up and not help affordability. I don't agree with his first statement but certainly the second. If we get 4-5 rate cuts like projected between now & this time next year there will be a lot of demand. In a perfect world the additional supply would help balance it out but there will still be a lock-in effect that will handicap the market long term so there's still going to be a supply/demand imbalance at least at the affordable price points.

I don't see how they can do 4-5 rate cuts and hope to dampen inflation. My business has been hammered by higher rates so I hope it happens but I think it will be 2026 before we see any major cuts.

i don't think we are currently on track for any rate cut this year ... and especially not 4-5 in the next year ..

It's all about the labor market at this point which is continuing to show signs of weakness. Fed sees the funds rate being 125bps lower by end of next year. They could very well be wrong again though.


I don't see how they can do 4-5 rate cuts and hope to dampen inflation. My business has been hammered by higher rates so I hope it happens but I think it will be 2026 before we see any major cuts.

PCE is running at 2.7% annual right now which isn't far off the arbitrary 2% target. If not for some very misleading ways home & shelter are calculated we would pretty much be there already. Leaving rates unnecessarily high is only driving real inflation up. Home prices & borrowing costs are not calculated in CPI or PCE but have an outsized effect on real inflation. Not to mention the divergence with the rest of the world cutting rates now - ECB, Canada, etc are going to create big risks here if they leave our rates high and more money starts flowing in here driving real rates & inflation up more.

Leaving rates unnecessarily high is only driving real inflation up. Home prices & borrowing costs are not calculated in CPI or PCE but have an outsized effect on real inflation. Not to mention the divergence with the rest of the world cutting rates now - ECB, Canada, etc are going to create big risks here if they leave our rates high and more money starts flowing in here driving real rates & inflation up more.

rates are now around historic norm ..... they were artificially low for 10+ years ..

it is very very likely that we won't see rates below 5.5 or so in the next 40 years ..

I know a few homebuilders are less optimistic than they used to be a few months ago. They have decided to focus on developing their current lots instead of purchasing new lots. They expect their inventory to sell slower than they predicted. They think there is pent up demand, but the current conditions are keeping prices high (the cost to build a new house, $160-$170 sf) and the demand for new houses restricted (higher and recent interest rates).

I know a few homebuilders are less optimistic than they used to be a few months ago. They have decided to focus on developing their current lots instead of purchasing new lots. They expect their inventory to sell slower than they predicted. They think there is pent up demand, but the current conditions are keeping prices high (the cost to build a new house, $160-$170 sf) and the demand for new houses restricted (higher and recent interest rates).

my builder friends feel like prices will go up significantly if there are multiple rate cuts ..

my builder friends feel like prices will go up significantly if there are multiple rate cuts ..

They are probably right, but they will need to get through the next 6-9 months in good condition.

They are probably right, but they will need to get through the next 6-9 months in good condition.

Great.. rate cuts that spur inflation of prices. Cheap money, create more money through debt, deregulate and make it easy money... easy debt, more money chasing goods. Guess some didn't learn anything from 2008.

Eventually things are going to level back out. Prices are basically flat year over year now and which direction they go from here depends on the direction of rates. I doubt we see much of a dip but I'd say next 6 months might create some opportunities. I'd be surprised if prices come down much if any but I think rents will skyrocket over the next few years as they trend back in line with what it cost to buy a home. Never has there been such a large difference as now.

Of course if they can cut rates multiple times without a recession almost certainly home prices are going to go up steadily as rates go down next couple years like they anticipate.

It's such a weird market, especially with the stock market absolutely booming and many people so flush if they were smart and invested in both real estate and equities all this time.

Just saw article about home prices are coming down in boom towns like Austin and Tampa.

It's going to be interesting to see if we hit new average all time highs at the end of this month or next. We were only slightly higher than where we were a year ago coming into June and the trends of last 2 years in this environment suggest we will hit new all time highs. It really depends upon the price point though- sub 300k is still going strong.

It sounds like we are on track for a December rate cut and then several more next year potentially. I could see prices pulling back a little again in the Fall, just like last 2 years, if rates stay high until then. So far they are trending down on lighter inflation data over the last few weeks which should help.

Fed's Khaskari said on face the nation yesterday best thing they can do for the housing market is get inflation back to normal. If they cut it's likely to drive prices up and not help affordability. I don't agree with his first statement but certainly the second. If we get 4-5 rate cuts like projected between now & this time next year there will be a lot of demand. In a perfect world the additional supply would help balance it out but there will still be a lock-in effect that will handicap the market long term so there's still going to be a supply/demand imbalance at least at the affordable price points.

fyi


Federal Reserve Governor Michelle Bowman said Tuesday that she does not expect to cut interest rates before the end of the year – and remains willing to hike again if progress on inflation stalls.

https://www.foxbusiness.com/economy/feds-bowman-sees-no-interest-rate-cuts-year