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What will lower interest rates mean for housing availability? Main Photo

What will lower interest rates mean for housing availability?

Posted: January 19, 2024 by VCK Group

Happy New Year! We have a lot of exciting things happening in 2024, but I want to focus on interest rates and residential availability for this new year. 
Right now interest rates are hovering around 6.75%, down from a high of 8% in October of 2023. This is good for buyers but we are hearing, from many sources, that rates will go even lower this year. This is the same prediction as last year, by the way, and look what happened. 
Here is my biggest concern: if the interest rates drop into the high 5% range, as predicted, I think buyers will take advantage of the lower rates to buy a home or to move down, move up, etc. That is good for those buyers and anyone selling right now.

The issue right now is inventory. Current residential housing availability in Mesa County is 461 properties. That number has been dropping every week for about 9 weeks now. That inventory could disappear quickly with substantially lower interest rates, with no substantial inventory to back-fill the decline. This could put us back into a multi-offer situation with prices increasing rapidly.

Here is why that could happen: People who own their homes free and clear would not be able to find what they want to replace their current home with and potential sellers that have current mortgages with interest rates below 4.5%, would not want to sell and have to borrow money at a higher rate. 
I was talking with Beau Bradley with Cross Country Mortgage, and he put it in succinct terms; "Buy now or fight for a home later".  So he and I have the same concern. 
Time will tell what will happen. I will work to keep you informed and up to date on the market in our great valley. In the meantime, please don't hesitate to call me or my great partners if you need the service of a Realtor.

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