October marked a two-decade high for mortgage rates, nearing 8%, which placed housing activity on lock and key. Rates have fallen since then, triggering an increased demand in both buying and selling that has housing prices on an upward swing.
As this initial phase of housing activity begins, real estate investors are seizing opportunities to secure properties before prices rise further. Investors also foresee an accumulation of equity that may peak by spring, aligning with predictions of a housing boom at that time.
Analysts Anticipating Reduction in Mortgage Rates
The 30-year fixed mortgage rate increased by a small margin of 0.04 percentage points from 6.61% to 6.62% for the week ending January 11th. Despite this, analysts anticipate a decrease in rates in the coming months. “Assuming no significant economic shocks, mortgage rates are likely to continue slowly easing over the next few months, to reach a 6% to 6.5% range by spring of 2024,” says Crystal Sunbury, a real estate senior analyst at RSM US.
This prediction is due, in part, to the Federal Reserve’s previous meeting that held the key interest rate steady at 5.25% to 5.5% for a third consecutive time and projected three rate cuts to happen throughout 2024.
Related Article: Feds Keep Key Interest Rate Unchanged Confirming Housing Explosion on the Horizon
An Uptick in Property Prices is Already Evident
With interest rate cuts in the near future and mortgage rates poised to drop further, housing prices have taken an opposite trajectory by rising.
Even with mortgage rates not at their expected low, some homeowners are getting ahead of the game, as mentioned by David Palmer, a real estate agent with Redfin Premier, as he comments, “Sellers have started coming out of the woodwork because that’s typical for January and because mortgage rates have dropped. They’re also coming to terms with the fact that rates aren’t going back down to 3% any time soon, which makes it easier to pull the trigger on selling.”
Housing Market Bracing for Explosion this Spring
Springtime typically marks the beginning of the real estate market’s most active period. During this time, the influence of lower mortgage rates is anticipated to increase activity as pent-up buyers and sellers flood the market. This likely upswing in housing activity, coupled with the current lack of housing, can lead to a highly competitive environment characterized by bidding wars, which can push prices up further.
“The housing inventory remains critically close to unprecedented lows and a turnaround is not expected any time soon. I don’t expect to see a meaningful increase in the supply of existing homes for sale until mortgage rates are back down in the low 5% range, so probably not in 2024,” explains Rick Sharga, founder and CEO of CJ Patrick Company, a market intelligence firm.
Considering these market outlooks, investors are deciding to act quickly to take advantage of lower prices and to secure equity as property values climb.
Related Article: Investing in Real Estate Early 2024 Can Provide You With Significant Financial Benefits
Investors Looking for a Fast Path to Rental Real Estate Ownership
Considering the urgency to invest before prices soar, individuals are seeking out faster ways to make a purchase happen. One effective strategy is to work with Morris Invest, an experienced full-service real estate investment company. When you buy a rental property through us, no experience is needed, and we take care of all the details for you, including placing a property manager and tenant.
Our team can help you secure a property before the spring when prices are predicted to surge. It’s a smart investment move that will generate increased equity that can eventually be utilized to purchase an additional property. It will also provide you with a high return on your investment, and place a cash flowing asset in your portfolio.
For those who would like to invest before prices escalate, schedule a free call with Morris Invest so we can get you set up with a lucrative rental property that performs, placing you on the path to financial independence.
Morris Invest Financial Resources & Programs
- The Freedom Number Cheat Sheet
- Financial Freedom Academy
- The 90-Day Financial Empowerment Bootcamp
- Morris Invest & SDIRA Program Overview
Take a moment to view our video that covers the best time to invest in rental real estate:
Ready To Build Passive Income Through Rental Real Estate?
Ready to talk about your goals? We're here to show you the tools and teach you the process to begin earning legacy wealth for you and your family.
