February 2024 Market Update

Happy February!

The market is mimicking the weather. Things are warming up with more buyers getting their pre-approvals ready and starting to get out there with the inventory that is trickling in. 

We are hosting a workshop, Smart Selling and Buying, on February 28th from 5:30 - 6:30pm to give you insight into the market and make sure you are ready to buy, sell, or do both! Cynthia Veroneau will join us as a local lending expert to give you customized guidance. We will be meeting at the Cloudport Coworking space in Portland. Register here.

MARKET INSIGHTS FROM THE ERIN OLDHAM TEAM

• Federal Rate Meeting. While mortgage rates do not follow the federal interest rates directly (the 10 year US Treasury Yield has a higher correlation with mortgage rates), the federal decision gives us an indication of where things might go. On Jan 31st, Powell decided to hold the current federal interest rate steady. There is some speculation that the feds may take rates down a quarter point in the June announcement. We are starting to hear people talking about rates in the low 6s/high 5s by the end of the year. We have been seeing rates anywhere from 6.2 to 6.6 depending on the individual situation and property. 
• Winter Opportunities. There is not a ton of inventory right now but we are scouring what is out there. We are encouraging folks to get out there now to start researching the market and to potentially approach properties while there is less competition. As a team, we have quite a bit of inventory hitting the market in March. We expect things will pick up right around then as people who have been waiting will add their homes to the market.

Strategy of the Month: Strengthening Yourself As a Buyer

Over the last six months, we have seen more deals fall apart due to financing. My guess is that this was an effect of rising interest rates that knocked people out of the ring.

• Get pre-approved, not prequalified. The big difference between the two is that a pre-approval requires the lender to actually check your credit score and verify your income. This gives all parties more confidence that your deal will make it to the closing table.
• Comparison shop. It is worth comparison shopping for lenders. They all have different products, different interest rates, and different closing costs. Insist on getting a summary of all costs so you can compare lenders and the deals they can offer you. Ask them how they will “win your business”! Ask the lender how quickly they can close and about their experience level in getting through tough situations. 
• Save cash. This makes a difference as you will be able to put more down on your loan which will decrease your interest rate. It can also help you compete in terms of the price you offer and in terms of covering an appraisal gap (let’s discuss!).

The Real Deal: The January 2024 Market

Homes that close in January likely went under contract in December - the slowest month of the year. Take that into account when studying these numbers.