October 2024 Rate Cut
Finally, after a long spell of higher rates, the Boulder real estate market breathed a sigh of relief with the Federal Reserve interest rates cut. Home buyers can now take advantage of lower home mortgage rates, right? Wrong.
You heard me Buster, “Wrong!” Sure, home mortgage rates briefly dipped – mostly on the anticipated news of the drop in rates. But then the folks at the Fed issued all sorts of proclamations about why rates were coming down. That information actually scared the finance folks into believing things were worse than anticipated. Money flowed into Bonds, and home mortgage rates actually increased.
We are expecting more cuts in the future all the same. But the betting money is that those rate cuts will be of a lesser amount when they do happen to come along. What’s this mean for Boulder home buyers?
Fourth Quarter is Best Home Buying Market
Bear with me here. The 4th quarter – October, November, December – is all about holidays. Halloween comes first, during which Christmas advertising actually starts to show up to compete with candy sales. Thanksgiving. Christmas, New Years (and Kwanza and Chanukah just to keep it fair for everyone). Holidays are not the best time to be selling a home (shh, don’t tell sellers this).
But some house owners still need to sell all year round. Maybe their price point just got good, maybe they have time to get the house looking pretty now that the kids are back in school. Maybe that big job opportunity just opened up, but requires a move. Whatever the reason. homes are for sale this time of year. And for buyers willing to shop around the Daylight Savings change (it suddenly gets dark early in the evening) history tells us now can be a great time to get a good deal.
There might even be another Federal Reserve interest rates change between now and an end of the year closing date. Just don’t expect it to have too much of an impact on your actual home mortgage interest rate. But as they say, you are marrying the house, not the rate.
Bottom line, if you can brave the chill in the air and make a home buying decision during the slowest time of the year, you have the opportunity to find the best deal. And why is that? Quite simply a lot of buyers are put off by the holidays. Or are waiting for more inventory. The catch with waiting of course, is more inventory comes with more buyer shoppers.
Real Estate Law Change Impacts Community
This year there is an additional wrinkle impacting Boulder residential home sales. You probably heard. There were a bunch of lawsuits, having to do with Realtor commissions. Something changed.
That change is impacting just about every brokerage out there, Big and Small. Some real estate agents are hanging up their careers and getting out of the industry. For others, (me), it is business as usual. The biggest changes consumers will notice is that:
- Buyers, not Sellers, are now ultimately responsible for paying their agent’s commission.
- Home shoppers need to sign a Buyer Agency agreement before seeing a property.
With or Without Federal Reserve Interest Rates Cuts
So, whether or not the Fed makes any more adjustments to rates, there are all these factors making right now a great time to buy a home. Lots of inventory relative to a few years ago. This weird legal change impacting the way commissions are paid. Higher home mortgage rates that might be off putting. Holiday season and the quietest time of the housing market.
And yet, for those consumers able to look past all of that, there is also less competition. Meaning fewer multiple offer scenarios. Plus far greater inventory to view and decide upon. And the possibility of refinancing down the road when rates improve.
So to heck with it, who cares if the Federal Reserve makes a change in rates or not. Now is a perfectly good time to find your dream home and get a great deal.
I want to speak to a few groups that should absolutely consider now the best possible moment to get into a home.
Time To Fly The Coop
First up, those of you living at home with Mom and Dad. Why is this such a perfect time, even if rates remain higher than recent history? Well, it is the holidays as I mentioned. So you will have plenty of reasons to hang around your parents’ house after you buy your first home.
And seriously for younger first time home buyers, there is scant competition out there. Waiting til Spring means competition with the home buying hordes. Acting now in the 4th Quarter guarantees you less competition and some of the best deals.
Good Renters Make The Best Home Owners
Stop renting. I hear a lot of reasons for it. Sometimes I hear folks that are new to the area throw out the line, “I want to learn the area before I buy my home.” I think these renters would be surprised to hear that executives making the leap to Boulder from other parts of the country usually take a weekend or two of Boulder house hunting to make a decision and leap into another house. There is no renting to get to know the area. Pretty much a myth.
Or the excuse, I’m too young. I’m just out of school, I couldn’t possibly buy my first house. I think I’ll just keep renting. Hey, I hear the safety in renting, but I think if you are successful, have your career or job moving in the right direction and that position would enable you to buy a home, now is a great market and a great time to take the leap.
Down Sizing Locals
What a great opportunity to buy if you have financial ability to buy first and sell second. In effect, you can act now, with far less competition and find your next home. Take your time to close the transaction. Maybe even celebrate Christmas one more time in your old home and then ring in a banger of New Year’s Eve in your new pad.
And then, boom, get the bonus of listing your old place for sale just as the Spring market starts up.
And for anyone buying in this last quarter of Twenty Twenty Four, there is the hope that home mortgage interest rates will improve in 2025 with Federal Reserve Interest Rates coming down. Fingers crossed.
ICUMI
Earlier this week I blogged about haunted houses in the real estate market. Check out the post.
