With home prices in Florida still generally on an upward trend, navigating the real estate market has become challenging for both buyers and sellers due to mortgage rates. Currently hovering around 7%, some buyers have opted to put their home search on hold, hoping for a decline in either market interest rates or home prices, or even both. However, is this the most effective strategy?
It’s understandable that buyers strive for the lowest possible interest rate. Additionally, many potential buyers have grown accustomed to a macro environment characterized by either low or falling interest rates, as this has been the prevailing trend in the United States over the past four decades. Nevertheless, the cyclical nature of interest rate movements makes it highly uncertain whether we will witness a substantial downward trend in rates in the next decade or beyond.
Inflation continues to exceed the Federal Reserve’s target, and recent economic data suggests that the Federal Reserve is unlikely to reduce rates in the near future. While the majority of forecasters anticipate some decline in rates within the upcoming year, it is important to note that this dip is unlikely to bring rates back into the range of 3-4% experienced just a few years ago. Furthermore, considering the ongoing influx of people relocating to Florida, it is improbable that home prices will significantly decrease in the short term. Unfortunately, the waiting game for buyers carries as much potential for downside risks as it does for realizing substantial gains.