Exploring the anticipated changes in real estate interest rates.
When it comes to real estate, one of the hottest topics on everyone’s mind is interest rates. Over the past five years, we’ve seen interest rates steadily climb, and it’s something that has caught the attention of both buyers and sellers. However, let’s take a step back and look at the bigger picture.
Yes, interest rates have gone up in recent years, but when you zoom out and consider the past three to five decades, the current rates aren’t as alarming as they may seem. Right now, we’re sitting at around 7.5% interest rates, but what does the future hold?
“It's essential to be aware of the changing interest rate landscape.”
Many experts and economists predict a downward trend in interest rates. There’s optimism that we might see rates in the low sixes, with some even daring to hope for the high fives. While the latter may be overly optimistic, a range in the mid-sixes seems plausible. This trend is expected to kick in towards the beginning of 2024 and maintain stability for approximately a year to 18 months.
However, it’s crucial to keep an eye on the inflation rate, as it plays a significant role in determining interest rates. Currently, inflation is on a downward trajectory, aiming to reach the desired 2% target. A few years back, it had spiked to nearly 8% or 9%, leading to the higher interest rates we’re experiencing now.
If you’re planning to buy or sell a property, it’s essential to be aware of the changing interest rate landscape. The forecast for 2024 and beyond looks promising, with rates likely dropping back into the sixes. Of course, all bets are off if inflation starts to surge again. To gain a clearer understanding of how these changes might impact your real estate plans, don’t hesitate to reach out to us by phone or email. We’re here to provide you with insights and answers to your questions about the future of interest rates in the real estate market.