What’s Up with Real Estate?
National news and local views for the week ending Friday, September 20, 2024
Big news! The Fed has made an aggressive 50-basis-point rate cut, kicking off a new easing cycle. While mortgage rates remain in the high 5% to low 6% for now, a drop could be on the horizon. Plus, multifamily home construction is booming, especially in the South! Stay tuned!
National Real Estate News
Fed makes big rate cut!
At its September 18 meeting, the Federal Reserve chose to cut short-term interest rates by 50 basis points (that's 0.5% or half a percent) from 5.5% --> 5.0%. That's an aggressive start to the new easing cycle, which on Fed member forecasts could see the Fed Funds Rate drop to 4.4% by end-2024 and 3.4% by end-2025. [Source: Federal Reserve]
Mortgage rates steady
Average 30-yr mortgage rates had already dropped from 7.43% to 6.14% BEFORE the Fed rate decision. That's why the actual Fed rate cut had a limited impact on mortgage rates. But not to worry. As the Fed rate cut cycle continues, mortgage rates will follow the Fed Funds Rate lower. The speed and frequency of future rate cuts will continue to depend on inflation and jobs data. [Source: Mortgage News Daily]
Here come the condos
In August new home permits (+5%), starts (+10%) and completions (+9%) all had a nice bounce. During COVID, we saw multifamily unit construction ramp to near record levels. Well, those apartments and condos are now being delivered at a pace we haven't seen since 1975! And 60% of those are being built in the South (includes TX & FL), which could continue to put pressure on rental rates there. [Source: Census Bureau]
Local Market Trends
As of Friday, September 20, 2024
Home inventory remains tight in Central Arkansas, with demand still outpacing supply. Home prices are holding strong, with slight increases year-over-year. Buyers are taking advantage of competitive mortgage rates, while sellers continue to see multiple offers, especially for well-maintained pr
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