No matter what your real estate goals are this year, it’s important to stay educated on the state of the market.
With the help of industry experts, including David Rodriguez from LoanDepot and Platinum’s Sales Director, Melissa True – we’re here to keep you up-to-date on all things New York City real estate.
In an ever-changing market, here’s what to anticipate over the coming months:
Interest Rates
The Fed has said they plan to lower the Overnight Fed Funds rate this year. While the Fed has openly mentioned as many as three rate cuts, most economists believe we could see as many as six rate cuts throughout the year.
The mortgage rate market for the 30-year fixed Fannie Mae loan has already come down from 8% at its highs in October to a 6.41% national average. Remember, the national average is for conforming or Fannie Mae loans, and in our market jumbo loans are pricing better than that at the moment.
If we continue to see easing in the economy, we could see the 30-year dip below 6% by the third or fourth quarter of this year. This leads to lower inflation news which is equal to lower rates.
Platinum Properties Sales Director, Melissa Joy True, says “it appears that at the mere hint of steady and declining rates, buyers have regained confidence in the market!”
How Does This Affect Buyers?
This year there is expected to be another large pool of first-time homebuyers. The rates are expected to dip to 6% creating a return of “move-up” buyers who are sitting in their homes with low rates and need more space.
However, lower rates will lead to more interest from buyers, which can lead to a more competitive bidding process – and the potential for sellers to counter non-contingent contracts.
Keep in mind that loans can be refinanced just six months after purchase if the rate decreases warrant a refinance.
True adds, buyers have already returned from the sidelines and are active and making moves toward purchasing. Signed contract activity jumped up nearly 40% month-over-month.
How Does This Affect Sellers?
True advises that sellers who have been waiting – patiently or otherwise – are poised to find renewed interest in properties that were languishing on the market in the second half of 2023.
The new surge of interest is helping to negate the impact of too many days on the market. Increased demand combined with a continued relatively low supply is tipping the scales ever so slightly in favor of sellers – for the first time in well over a year.
On the other side, sellers who were waiting for the prime spring selling season should be getting to market sooner rather than later. There is an appetite for a healthy supply pipeline, so the time to list is NOW!
Bank Products
Last year the market didn’t see a lot of deterioration of products, which is beneficial for buyers. This created a lot of interesting opportunities for buyers from temporary buy-downs, and bank statement loans, to higher loan values.
In this year’s market, it is important to prepare for banks to raise their standard for approvals. Buildings require a lot more information to be pre-approved by banks. Especially, if any building has leaks, façade work is not completed, or anything that could be viewed as a structural integrity issue.
Working with a lawyer before signing your contract is important to better prepare for any unexpected repairs or building surprises you may face after buying.
If you have questions about the state of the market, would like to kick off your property search, or be connected with one of our trusted lenders, please reach out to Platinum Properties today.
