7% IS TOO HIGH, BUYERS STOPPED BUYING, INVENTORY SKYROCKETS!

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Are you hesitating to buy a home because of the current interest rates? 🤔 Let's dive into why that might not be the best move and how the current rates aren't as high as you might think.

First off, let's talk about interest rates. 📈 We've all been spoiled with incredibly low rates for almost a decade. However, did you know that the average interest rate since the 1950s has been between 6.5% to 7%? That's right – today's rates are actually in line with historical norms! So, if you're waiting for those 2.5% to 3% rates to come back, you might be in for a long wait.

If you're enjoying the real estate insights and economic updates I provide, please consider subscribing and liking this video! 👍 Your comments mean the world to me, and I make sure to respond to each one.

Now, let's break down the impact of our current "high" interest rates. 💵 With a 7% interest rate, the monthly payment on a median-priced home of $400,000 is around $2,800. Compare that to a 3% interest rate where the payment would be closer to $1,800. Yes, that’s a significant difference, but remember, you can always refinance when rates drop! 🔄

What happens if you hold off on buying, expecting rates to fall? 📉 When interest rates do drop, the market will heat up quickly, with investors and buyers rushing to purchase properties. This surge in demand could drive prices up even more. As an investor myself, I can tell you – I'll be ready to buy as many properties as possible if rates hit 3% or 4% again.

Take a look at this chart from Freddie Mac showing historical interest rates since the 1970s. 📊 It provides a clear perspective on where we stand today. The good news is that we might see a couple of rate cuts in 2024, potentially around half a percent in total. However, don't expect drastic cuts that will significantly impact the market.

Our Federal Reserve Chairman, Jerome Powell, has indicated that rates won't be cut significantly until inflation is around 2%. 🏦 Given recent updates to the jobs report and other economic indicators, achieving this target might take some time.

Despite rising interest rates, home prices went up in 2023, which is unusual. 🏡 Typically, higher rates lead to lower home prices, but last year defied this trend. Will 2024 follow the same pattern? I predict slight rate cuts coupled with home price appreciation of around 2-3%.

Inventory levels are also on the rise, particularly in the West. 📈 Cities like San Jose, Phoenix, San Diego, and Denver have seen significant increases in listings. More inventory could mean more opportunities for buyers, especially if sellers become desperate.

For example, I recently saw a condo listed at $300,000 that went under contract for $185,000! Deals like this are out there, especially if you’re willing to make lowball offers. 🎯 Not every market will have the same level of desperation, but in places like Sarasota, Bradenton, and Northport, opportunities exist.

Thinking about making some lowball offers? 🤔 Go for it! You might upset a few agents, but as someone who prioritizes my clients’ needs, I’m not too worried about that. Whether you're a first-time homebuyer or an investor, there are deals to be had if you're strategic.

In 2024 and 2025, we might see interest rates around 6.6%. 📉 While not extremely low, this is still a favorable rate. Even a half-point reduction can significantly impact your monthly payment.

If you’re currently renting and waiting for perfect conditions to buy, you might find yourself competing with more buyers when the rates drop. 🏃‍♂️ Buying now allows you to refinance later and potentially save hundreds on your monthly payments. So, why wait? Investing in property now could be one of the best decisions you make.

Thank you for watching! If you found this information helpful, don't forget to like, comment, and subscribe for more real estate insights and economic updates! 📺✨