It's hard to believe the fourth quarter of the year is well underway, and the holidays are just around the corner! There is also a bit of uncertainty in the air for myriad reasons — and we've heard a lot of questions about how the housing market might be impacted. Here are a few answers to our most-asked questions.
We're approaching a historic day for our country — Election Day! We don't know about you, but we'll sure be grateful when the political postcards, texts, door knocks, and phone calls stop. The housing market tends to cool in anticipation of an election – and our PureWest agents agree that we should see an increase in activity following the conclusion.
Aside from the election, interest rates have also impacted the fall market. Following a 50-basis point drop, rates have begun to ease and will likely continue. As that happens, refinance risk becomes less of an issue; the Federal Reserve indicates that we have largely recovered from the COVID-induced economic disruption from 2020 - 2023. By the end of next year, rates are predicted to stabilize between 5% and 6%, signaling a return to pre-pandemic mortgage norms.
The "mortgage rate lock-in" effect is fading, which kept many homeowners from selling due to the disparity between their low fixed rates and higher market rates. Due to this effect, the Federal Housing Finance Agency reported that 1.72 million fewer home sales occurred in the past two years. As rates fall, pent-up demand is expected to drive activity. Additionally, lower costs of materials may spur more home building.
Although inventory remains an issue nationwide, most of our local Montana and Idaho markets have gradually increased this year, and homes have stayed on the market longer. With better financing options, opportunities are growing for homebuyers.
Clients often ask if they should wait to buy or sell. Warmer months bring an influx of fresh listings, which creates more competition for sellers, making it harder to stand out. Buyers who wait may get a slightly better interest rate, but if everyone enters the market simultaneously, they may pay more for the same home. If you're considering buying or selling, we think your best bet is to act now. Reach out to your local PureWest agent today to discuss your options!
