DETROIT (WXYZ) — Unpredictability has hopeful homebuyers and sellers in a choke hold right now, waiting for the Federal Reserve to announce how much they plan to adjust interest rates.
Stuart Elsie, the President of Financial Services at Real Estate One, says closings on homes have been slightly lower than last year at this time, but pending transactions are sitting higher compared to 2023. And Stuart says we have Mortgage Rates to thank for that.
"This is a more important Fed meeting...let's just leave it at that," Stuart said. "The lower rates that we've seen has actually spurred more buyers to come into the market."
But this is not finishing the job quite yet.
"This helping new sales, and I think we'll see those closings in the future months," Stuart said.
Stuart says the general consensus is the Fed is going to lower the interest rates between 25 and 50 basis points, but he says at least for the housing market, it's more about the attitude of chairman Jerome Powell.
"If he's more dovish and he talks about the need to reduce the rated to more neutral rate policy, the market may react to that and we may see a drop in rates as a result of that," Stuart said.
And it isn't just the byers that will benefit. Stuart says, sellers often become buyers, but many can't justify almost doubling their current mortgage rate, so they are sitting quietly, waiting to see what happens.
"We will see more listings and potentially more buyers if rates come down," Stuart said.
Realtors I spoke to today stressed the importance of the housing market on the economy, saying it's a ripple effect. High demand means more opportunity to build, utilizing man power and materials. So this decision stretches much farther than just buyers, sellers and realtors.
