By Serj Markarian, Licensed Real Estate Salesperson
Brown Harris Stevens CEO Bess Freedman recently sat down with CNBC’s Brian Sullivan of “Last Call” to discuss the current market conditions. While much of the conversation touched on topics previously addressed in recent months, I believe it's valuable to reiterate key points highlighted during their dialogue.
In short, Freedman underscores that the little movement we’ve seen in mortgage rates is a significant factor impeding market activity. Despite this, she reminds us that mortgage rates remain historically low. The perception of rates hovering around 2 or 3 percent was a unique occurrence influenced by various post-pandemic economic factors a few years ago. Freedman doesn't anticipate a return to those levels in the near future. Instead, she suggests that we should adjust our expectations, acknowledging that a 6 or 7 percent rate for a 30-year mortgage is likely to be the norm for the foreseeable future.
She encourages that individuals interested in buying and have the means to do so, should purchase if they find a home they love. She believes that they will have the opportunity to refinance at a later date. While the Federal Reserve has not specified when they will lower the fund rate, there's anticipation that it might occur in the second half of the year, which could potentially bolster the housing market.
As widely known, housing remains one of the smartest investments, and as Freedman notably points out, "the market is there to serve you, not instruct you." Seemingly, the primary setback currently is inventory shortage. Through numerous conversations, she has discovered that individuals are hesitant to list their homes due to the scarcity of alternative housing options. She anticipates that as rates begin to decrease, inventory will gradually become more available, as I also mentioned last month.
Finally, Freedman cautions that this shift won't be sudden or dramatic. She believes that this year won't see significant changes. While it may show improvement compared to last year, she doesn't expect major shifts. Given that it's an election year and there’s turmoil across the globe, there's still considerable uncertainty. Therefore, Freedman highly suggests patience and cautious optimism.
