What are experts saying about a Fed rate cut?
Inflation? In the process of cooling. The jobs market? Also starting to slow down. Mortgage rates? Still a bit higher than homebuyers would like, but near a two-month low. We’ve seen progress made on the economic conditions that the Federal Reserve weighs against cutting rates, but what would it look like if they really did?
CBS News spoke to regional vice president at William Raveis Mortgage, Melissa Cohn, and got her answers as to what a rate cut would mean for the mortgage market.
When asked about the timing of the first rate cut, Cohn stated, “We are likely to have just one rate cut in 2024 for 0.25% based on the dot plot and all the Fed discussions where members continuously reiterate that they need to see greater evidence that the rate of inflation is moving towards the Fed’s 2% target rate .”
CBS News asked what a rate cut would look like for mortgage rates. Cohn said, “When the first cut happens, there will also be an immediate reaction from the bond market, and mortgage rates will drop.”
Cohn was also asked about how homebuyers should approach the market. She said, “If you wait for rates to drop, it may be the end of the year before you buy, and remember that when rates drop, real estate prices are likely to go up.”
Has Manhattan flipped to a buyer’s market?
Believe it or not, but Manhattan has started to flip from a strong seller’s market to more of a buyer’s market, according to recent data compiled by CNBC.
Home inventory in Manhattan is up, prices are coming down, and renters are looking to leave high cost rentals.
The average real estate sales pricein Manhattan fell 3% and inventory ticked upwards in the second quarter of 2024. This includes the price of luxury apartments, which fell for the first time in more than a year.
Manhattan currently has a 9.8 month supply of apartments for sale. According to a recent report on housing from Brown Harris Stevens, “Any number over 6 months tells us there is too much supply and we are in a buyer’s market.”
High rents are also helping sales by pushing would-be renters into buying. Jonathan Miller, CEO of the appraisal and research firm Miller Samuel, stated, “If people were sitting on the fence, the high rents maybe helped push them into the sales market.”
Which markets could see a price correction soon?
A recent article from Fast Company used data from Parcl Labs to detail the top 15 housing markets that have the highest risk for a price correction.
Where were these markets? They were all located in the Sun Belt, but only one of the markets listed was outside of Florida. 14 of the top 15 markets most at risk for a price dip were in the Sunshine State. The Myrtle Beach-Conway-North Myrtle Beach metro area in South Carolina was the only outlier.
The Crestview-Fort Walton Beach-Destin, FL metro area claimed the top spot on the list.
Jason Lewris, cofounder of Parcl Labs, wrote, “The consistency of downward trends across multiple Florida markets indicates that previously observed supply-demand imbalances and increased price cuts are now translating into actual price declines. This emerging weakness in prices, particularly in high-performing markets like Tampa and Miami, could signal the early stages of a market correction in the region.”
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